European and America stocks reach record levels on trade hopes
European stocks and US futures rose as the market continued to receive more information on trade. The US and Chinese negotiators talked yesterday and it appears that there is some progress. This was confirmed by Donald Trump, who said that the US was in the “final throes” in its attempt to reach a deal. There is a likelihood that the two countries may reach a deal before the end of the year. Meanwhile, Chinese stocks declined after data showed a sharp decline in industrial profits. Industrial profits declined by an annualized rate of -9.90% in October after suffering another decline of 5.30% in September. China is also seeing an increase in the number of small bank failures. China A50 declined by 31 points.
The New Zealand dollar remained in a holding pattern as the markets received important trade numbers. According to Statistics New Zealand, exports increased to $5.03 billion in October from the previous $4.36 billion. Imports increased from $5.68 billion to $6.05 billion. Exports were led by dairy, beef, and lamb exports but offset by a decline in logs and kiwifruit. These numbers came after the statistics office released retail sales numbers. These numbers showed that 11 out of the 15 retail sectors rose in October. These positive numbers, coupled with a likely trade deal between the US and China could take the pair higher.
The US dollar moved up slightly after a series of positive data from the government. The second reading of the third-quarter GDP rose by 2.1%. This was better than last month’s estimate of 2.0% and higher than the consensus estimates of 1.9%. This will be a good number for Trump. Durable goods orders rose by 0.4%, up from last month’s decline of -1.4%. Core durable goods rose by 0.6%. Corporate profits rose by 1.3% in the third quarter. This was below the last quarter’s 3.7%. Meanwhile, initial jobless claims declined by 213k in the past week while continuing jobless claims declined from 1,697k to 1,640k.
The NZD/USD pair was unchanged today and is currently trading at 0.6426. This is slightly lower than the intraday high of 0.6432 and higher than the day’s low of 0.6420. The price is between the channel that has been forming between 0.6395 and 0.6436. The price is trading along the 14-day and 28-day moving averages while the RSI has stabilized along the neutral level of 54. The pair may see a significant breakout ahead of the new month.
The GBP/JPY rose to an intraday high of 140.67, which is the highest level since Monday. The pair is slightly below the important 61.8% Fibonacci Retracement level. The price is also below the 14-day and 28-day moving averages while the RSI has moved slightly below the overbought level. The momentum indicator has continued to move above 100. The pair may continue to move higher to test 141.
The EUR/USD pair declined to an intraday low of 1.0998. This was the lowest level since November 11. The price is along the lower line of the Bollinger Bands. The RSI has dropped to 35. The dots of the Parabolic SAR are above the current price. The pair may continue moving lower to test the important support of 1.0988.