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International financial news

International financial news

[API report: US crude oil inventories increased by 5.9 million barrels to 430 million barrels last week] 

API gasoline inventories increased by 6.7 million barrels, refined oil stocks increased by 6.4 million barrels, and Cushing crude oil stocks decreased by 1 million Barrels; US crude oil imports fell by 23,000 barrels per day to 5.9 million barrels per day last week.

[The US ISM non-manufacturing index rose to a four-month high in December] 

The US ISM non-manufacturing index in December was 55, better than expected 54.5 and the previous value of 53.9, the highest since August 2019. Among them, the business activity index rebounded from a nine-year low, but the new orders and employment index fell sequentially, and the import index shrank for four consecutive months. Some analysts said that the US service industry is not immune to manufacturing drag.

[New York Fed's 14-day repurchase is oversubscribed, but may not reflect the existence of financial pressure in the market]

The New York Fed's $ 35 billion buyback operation was oversubscribed on Tuesday, but analysts said that this did not mean a renewed pressure on the capital market. Analysts said that over-subscription does not indicate a concern in the repurchase market, it merely reflects that traders have replaced the approximately $ 80 billion repurchase agreement that has expired in the past two days.

[U.S. trade deficit in November fell to its lowest level since 2016 due to export growth] 

Driven by export growth, the U.S. trade deficit narrowed to its lowest level in three years in November, and imports fell to its lowest level since 2017 due to export growth. According to data released by the U.S. Department of Commerce on Tuesday, the US trade deficit in goods and services in November shrank from $ 46.9 billion to $ 43.1 billion.



News and Data



Labor Cash Earnings (YoY) (Nov)     



Building Permits (MoM) (Nov)



Consumer Confidence Index (Dec)



Consumer Confidence (Dec)



Halifax House Prices (MoM) (Dec)



Services Sentiment (Dec)



Industrial Confidence (Dec)   



Consumer Confidence (Dec)



Business Climate (Dec)



10-y Bond Auction

Summary of investment bank views

TD: The US dollar is relatively cheap, the Canadian dollar is a bit expensive

Mark McCormick, global head of foreign exchange strategy at TD Bank, said that the model and short-term position indicators show that the US dollar may be undervalued and a rebound may occur against several G-10 currencies. The US dollar's short position against its G-9 currency is roughly 78% of the 3-year interval, "so it is expected to rebound in the short term. The Swiss franc, Norwegian krone, British pound and Canadian dollar appear to be the most expensive; High oil prices cannot provide the same support to the Canadian economy as in the past few years.

HSBC Holdings: Eurozone inflation and oil prices will not change ECB's dovish stance 

Eurozone inflation data released on Tuesday was not enough to change the ECB ’s dovish stance. Core inflation in the Eurozone is expected to remain low this year, in the 1.2-1.4% range; despite the tight employment market in some Eurozone economies, many countries still There are signs of idleness, which may limit upward pressure on wage growth, and thus curb potential inflation; the European Central Bank may stay in the near future and implement QE for a long time; even if the price of oil rises significantly (increase inflation), It is unlikely to push the European Central Bank in a hawkish direction.

United Overseas Bank of Singapore: Bank of Japan not expected to change monetary policy environment

UOB Singapore economist Lee Sue Ann said the Bank of Japan is expected to maintain its monetary policy unchanged at the January meeting. It believes that it is not enough for the Bank of Japan to continue not to take forward-looking guidance. As economic data declines, the Bank of Japan still needs to take action eventually. The bank expects that the Bank of Japan will further relax its policy by deepening its negative interest rate policy guidelines, and may lower interest rates by 10 basis points to -0.2% later in the first quarter of 2020.

Australian dollar will fall for five days in a row, risk of further decline

Forexlive analyst Justin Low said that at the end of 2019, the Australian dollar briefly broke through the 0.70 mark and then quickly fell back. The market is betting that the RBA may relax its monetary policy next month and the Australian dollar may fall for five consecutive days. Current cash rate futures show a 57% chance that the RBA will cut interest rates by 25 basis points, coupled with the US dollar holding steady, making the Australian dollar fall below the 200-day moving average below 0.6897.

The next support level of the currency pair is expected to be near the 100-day moving average and the low of 0.6830-38 on December 17th. There is still room for the possibility of the current market betting on the RBA to cut interest rates, coupled with the upcoming economic data or the market Disappointed. From a technical point of view, the trend of the Australian dollar is worrying in the short term. If the fundamentals remain the same, the Australian dollar may fall further before the RBA ’s interest rate decision comes next month.

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