Global markets mixed ahead of China-US talks
Global stocks were mixed today as investors waited for the outcome of talks between the United States and China. US officials are expected to have discussions with their Chinese counterparts as a follow up to the meeting between Donald Trump and Xi Jinping in Argentina. Asian stocks rose with the Shanghai and Hang Seng gaining by 18 and 210 points respectively. Nikkei gained by more than 470 points. In Europe, the DAX, CAC, and Stoxx declined by 55, 25, and 20 points respectively. US futures pointed to a lower open with the Nasdaq and S&P shedding 9 and 3 points respectively.
The euro was little moved against the USD after mixed economic data from Europe. In November, Germany’s factory orders slumped by 1%. This was a sharper decline than the expected contraction of 0.2%. In October, the orders had risen by 0.2%. On a positive note, the country’s retail sales increased by 1.1% in November. This was higher than the estimated slump of 0.7%. In the EU, retail sales rose by an annual rate of 1.1%. On a MoM basis, the retail sales rose by 0.6%, higher than the estimated 0.2%.
The USD index was little moved today ahead of key data from the US. The factory orders for November are expected to show an increase of 0.3%, which will be higher than the drop of 2.1% in October. The ISM non-manufacturing PMI is expected to reduce slightly to 59.6 from October’s 60.7. Other important data that will be released will be the ISM non-manufacturing business activity.
The EUR/USD pair was little moved today. It remained near Friday’s close at 1.1447. On the hourly chart, the pair remains above the shorter-term moving averages and nearer to the upper line of the Bollinger Band. The RSI has flattened slightly below the overbought level of 70 while the parabolic SAR pair shows that the pair will likely retain the upward momentum.
After rising sharply earlier today, the price of Brent eased a bit to hit a low of $58. Today’s high was $59. On the hourly chart, the average directional index has risen sharply to the highest level in weeks. This is an indication that the upward trend could continue. It could also be an indication that the upward momentum could slow a bit. At the same time, Ichimoku Kinko Hyo indicator shows that the price of Brent could maintain the upward trend. If it does, it will likely test the important resistance level of $60.
The GBP/CHF pair declined today from a high of 1.2570 to an intraday low of 1.2500. The decline came as volatility in the pair eased after rising sharply a week ago. On the hourly chart, the pair’s price is along the 14-day moving average. The RSI has moved from 70 to the current 30. At the same time, the parabolic SAR shows that the pair could continue the downward trend.