· The dollar dropped on Friday after data showed a mixed view on the economy, and as optimism that the United States and China will reach a deal to end their trade war reduced safe-haven demand for the greenback.
The dollar index against a basket of six major currencies fell to 97.24, down 0.12% on the day. It earlier rose to 97.45 on the jobs data.
The euro started the week firm at $1.1168 EUR= as bulls looked to test the October peak of $1.1179 and the 200‑day moving average at $1.1195.
The dollar fared a little better on the yen as safe havens fell from fashion, edging up to 108.22 JPY= from Friday's low around 107.87.
Sterling remained well bid at $1.2931 GBP=, after last month's rally from $1.2200, as investors wagered there was less risk of a hard Brexit now that an election campaign was underway.
· President Donald Trump said on Friday that talks on a trade agreement with China were coming along well, echoing comments by U.S. and Chinese officials of progress on an initial deal.
U.S. President Donald Trump said he hoped to sign an agreement with Chinese President Xi Jinping at a U.S. location, perhaps in the farming state of Iowa, which will be a key battleground state in the 2020 presidential election.
“China wants to make the deal very much,” Trump told reporters at the White House on Friday evening. “I don’t like to talk about deals until they happen, but we’re making a lot of progress.”
· The United States and China are on a good path to complete the first part of a trade agreement, but two additional phases will be needed to address all of China’s “structural deadly sins,” White House trade adviser Peter Navarro said on Friday.
The initial “phase one” trade pact with China appears to be in good shape and is likely to be signed around mid-November, although a finite date is still in question, U.S. Commerce Secretary Wilbur Ross said on Friday.
· Commerce Secretary Wilbur Ross said Sunday that licenses for United States companies to sell components to Chinese telecom giant Huawei are coming “very shortly,” and expressed hope that the U.S. would reach a trade deal with China this month.
“We’re in good shape, we’re making good progress, and there’s no natural reason why it couldn’t be,” Ross said during an interview on Bloomberg Television in Bangkok. “But whether it will slip a little bit, who knows. It’s always possible.”
· U.S. job growth slowed less than expected in October as the drag from a strike at General Motors (GM.N) was offset by gains elsewhere and hiring in the prior two months was stronger than previously estimated, offering some assurance that consumers would continue to support the slowing economy.
While the Labor Department’s closely watched monthly employment report on Friday showed the unemployment rate rising from a near 50-year low of 3.5% last month, that was due to an influx into the labor force, a sign of confidence in the jobs markets. The report supported the Federal Reserve’s decision on Wednesday to cut interest rates for the third time this year and signal a pause in the easing cycle that started in July when it reduced borrowing costs for the first time since 2008.
· A concentrated burst of interest rate cutting and other measures to loosen global financial conditions by the world’s central bankers looks to have largely run its course, and policymakers now appear content to wait and see if their handiwork staves off a deeper slowdown in the months ahead.
For their parts, the Big Three in the central bankersphere - the Fed, European Central Bank and Bank of Japan - are in no rush to drive rates any lower, especially in Europe and Japan where they are already in negative territory.
· The United States is disappointed by a World Trade Organization (WTO) decision that China may slap compensatory sanctions on U.S. imports worth $3.579 billion annually for the U.S. failure to remove anti-dumping duties, a U.S. official said on Friday.
· China’s President Xi Jinping said on Sunday that the country will promote the globalization of Shanghai’s financial markets through the Belt and Road Initiative, and the city should strive to master the core links of the industry chains.
The financial hub should courageously jump into the ocean of the world’s economy and fight the storms to build strong tendons and strengthen the bones, Xi said on a tour in Shanghai ahead of an import fair next week.
· British Prime Minister Boris Johnson drew an angry backlash from Brexit Party leader Nigel Farage on Saturday after he rejected calls to drop his Brexit deal and embrace a clean break from the European Union, potentially splitting the euroskeptic vote.
British Prime Minister Boris Johnson said his failure to deliver Brexit last week as he had promised was a “matter of deep regret”, but his deal remained to only way to get Britain out of the bloc.
· Nigel Farage, the leader of Britain’s upstart Brexit Party, said on Sunday he would not stand in next month’s election, choosing instead to campaign countrywide against Prime Minister Boris Johnson’s EU divorce deal.
· U.S. President Donald Trump on Sunday urged British Prime Minister Boris Johnson and Brexit Party leader Nigel Farage to come together to safeguard prospects for expanded U.S.-UK trade after Britain leaves the European Union.
Trump told reporters at the White House that both men were friends of his, but Johnson was “the right man for the time.”
· Oil prices rose nearly 4% on Friday on signs of progress in U.S.-China trade talks and stronger-than-expected economic data in both countries, including U.S. employment and Chinese manufacturing activity numbers. But the move higher was not enough to recover losses earlier in the week and oil ended the week lower.
Brent crude gained $2.12, or 3.6%, to settle at $61.74. West Texas Intermediate crude rose $2.02 or 3.73% to settle at $56.20 a barrel.
Both benchmarks fell earlier in the week after in hike in U.S. crude inventories, especially at the Cushing, Oklahoma, delivery hub for WTI, and as the trade war between the world’s two biggest economies has weighed on prices, fanning fears that slowing economic growth could dent demand for oil.
· Hong Kong anti-government protesters crowded a shopping mall in running clashes with police on Sunday during which a man with a knife slashed several people and apparently bit off part of a local politician’s ear.
A human chain in Cityplaza, in the eastern suburb of Taikoo Shing, turned into a face-to-face conflict with police, running up and down escalators where families with young children had been window shopping just minutes before and watching skating on the ice rink.
Reference: Reuters, CNBC
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