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Here is what you need to know on Friday, November 22:

Trade: The main headline of the day came from the South China Morning Post, in an article entitled, “China watching Donald Trump’s response to US Hong Kong bill as it threatens to become new barrier to trade deal,” and bullet points as follows:  

  • One source says Beijing may decide to ‘fight and talk alternatively’ and is now closely monitoring the US president’s next move following the vote by Congress
  • China reacted angrily to the proposals, accusing Washington of interfering in its internal affairs, and may feel obliged to respond.

The article was stating that China will not make a deal with the US if Trump signs the Hong Kong bill into law. However, on the flip side, the article also said that  the US may be willing to delay the 15 December tariffs if an agreement is not reached by then. This followed earlier conflicting news that Chinese Vice Premier Liu He  said that he is confident about reaching Phase One of a deal with the US. Overall, the  endless stream of conflicting stories  left the USD little changed, +0.13% on the day, testing 98 the figure in the DXY, (21-DMA), having broken above the 21 4-hour moving average and taking on the converging 50 & 200 moving averages in the same time frame.  

BoC: The Bank of Canada’s governor,  Poloz, sent a beleaguered CAD a little higher  with less dovish than expected comments overnight. WTI was also supportive of the CAD on OPEC sentiment ahead of Dec 5th/6th meetings where markets expect an extension to production cuts in 2020.  

Looking ahead:  Markets are waiting to see if Trump signs off on the HK deal, putting it into law and what that might mean with respect to retaliation from China which could make for a volatile end to the week in Asia before  global advance PMI releases in European Friday markets.  

More:  Trump Impeachment: Markets will not like any replacement