If the market was expecting any additional evidence of a weakening of the Fed’s policy, the received Friday information can support this sentiment, the US employment report was disappointing. In the last weeks of the year, a clear wave of US dollar decline is being formed. However, this week all market attention will be focused on events in the UK.
On Friday we can say that the optimism of the trade deal between the US and China turned out to be short-term, although it helped to compensate for some risk this week, although we are not sure that this will be enough to prevent US stock market from falling deeper. Friday's calendar includes German industrial production, GDP in the Eurozone, and a monthly employment report from US non-farm jobs. Trading session will be volatile and interesting.
The week has started with USD dollar sales and the resumption of risk appetite on the background of news about the 90-day trade truce between the US and China. The market also marks a rise in oil prices after Saudi Arabia and Russia agreed to manage oil production levels until 2019. In addition, this week will be extremely interesting as it is full of information and market data, as almost every day the week there will come out important news and data.
Friday session marks the end of November, and when we look at the markets in the last month of the year, the situation reminds the alignment of forces characteristic to the 1st quarter of 2018. When the year came into its force, US dollar was under pressure and the sense of risk was precarious. Let's see how the last month of the year will manifest itself in the markets.
There have been a shift of market sentiments in the middle of the five-day period, and it seems that the inactive part of the trading week was left behind. Many of these changes occurred at the end of Wednesday when Fed chairman confirmed recent speculation that the Fed would be more inclined to slow down the process of normalizing policy, amid risks associated with too quick rate hike.
We're into the middle of the week and as things stand, US Dollar is in the driver's seat, as the greenback getting a lot of help from a Tuesday session. However, the question is how long it can last - the dollar is overbought and the annual maximums have already been reached. BOE financial stability report and stress tests ahead, followed up by first US data and a Fed Powell appearance.
Markets are trying to shake off the holiday hangover to focus on the final trading weeks of the year . Overall, we’ve been seeing some renewed dollar pressure, downside sentiment in stocks and mixed price action on the commodities , with goold supported into dips, and oil collapsing off its October, yearly high.