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International financial news

International financial news

[API report: US crude oil inventories increased 3.6 million barrels to 449.6 million barrels for the week ending November 22]
Gasoline inventories increased by 4.4 million barrels, refined oil inventories decreased by 665,000 barrels, and Cushing crude oil inventories decreased by 516,000 barrels. US crude oil imports increased by 221,000 barrels / day to 6.7 million barrels / day.

[Fed Kaplan: Monetary policy is currently at a good level]
There is a good chance that GDP growth will reach 2% next year, and growth in the fourth quarter may be weak. The economy needs more than just the impact of monetary policy. When adjusting interest rates, we need to see substantial changes in the outlook.

[RBA Chairman Lowe: Negative interest rates are "absolutely impossible"]
The threshold for using QE has not yet been reached. If employment and CPI are far from target levels, the RBA will consider QE. Employment and CPI are expected to approach targets in the coming years. The probability of a recession is low.

[Fed Governor Brainerd: Do not think negative interest rates will work in the United States]

Negative interest rates will not be a good choice for the United States, and the country's financial system is different from other countries already experimenting with this strategy. Brainerd described a generally positive short-term outlook for the US economy, while advocating for long-term changes in monetary policy behavior in an era of low interest rates and low inflation.


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News and Data

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CB Consumer Confidence (Nov)

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New Home Sales (Oct)

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RBNZ Gov Orr Speaks

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BoE MPC Treasury Committee Hearings



Summary of investment bank views

Scotiabank: Euro could rise to $ 1.20 in next 12 months




Scotiabank believes that despite the disappointing growth brought about by trade and Brexit, negative interest rates, and dollar demand, the euro may climb to $ 1.20 in 12 months. Chief currency strategist Shaun Osborne and currency strategist Juan Manuel Herrera wrote in a report on Tuesday that the euro was undervalued against the US dollar, but we thought so last year; they said the fair value of the euro against the US dollar was 1.1330, a support level Around 1.09; the currency pair is currently around 1.1020.

Two strategists said that shrinking growth and spreads made the dollar more vulnerable to the structural imbalances of the U.S. economy; history shows that when the U.S. economy lacks growth advantages and the yield differential is "less attractive", Investors have a lower “tolerance” for rising US deficits; strategists “expect growth differentials to stabilize at least in 2020” and point to signs of a decline in German manufacturing that is stabilizing. The repricing of the U.S. dollar will depend on a significant reduction in global trade uncertainty in the coming months, which will reduce part of the U.S. dollar's security premium and allow the euro to "catch up with what we believe could have supported higher exchange rates."

Deutsche Bank closes long sterling on grounds of Brexit and interest rate cuts




Deutsche Bank strategists said the prospect of a hard Brexit and interest rate cuts made the pound unattractive, and they recently closed a long GBP position. After a sharp rally in October, the bank's strategist "any excitement over the remaining pound sterling is quickly flowing away," wrote George Saravelos, head of global currency strategy at Deutsche Bank, in a report to customers; he said that the market will further Positive election results are reflected in prices.

As the UK data "worries the picture", there is a risk that the Bank of England will cut interest rates. Even with the orderly Brexit in early 2020, economic uncertainty in 2020 "seems to be as severe as in the past three years." Saravelos pointed out that the "Withdrawal Agreement" can only postpone the hard Brexit deadline to December 2020, and the Conservative Campaign Declaration did not promise to further extend the transition period. Although this position may change, it is unlikely to happen soon.


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