Macrowatch – US-China optimism aims stocks higher, further gains forecast

  • US President Trump spoke on trade at the Economic Club of New York on Tuesday with a positive view on a China trade deal, but also with threats of further tariffs if a deal was not made.
Trump economic club NY
  • Then Thursday evening saw Larry Kudlow (economic advisor at the White House) signal a deal with China was close.
Larry Kudlow
  • US share indices (the Dow, Nasdaq and S&P 500), went on to hit all-time highs Friday.
  • Jerome Powell (Fed Chairman) gave an upbeat account on the US economic outlook when testifying to Congress through the middle of the week but didn’t signal the path for interest rates into 2020.
  • In the UK, the Brexit Party will not stand in any of the constituencies won by the Tories in 2017 and are not contesting 38 other marginal seats that the Conservatives could win.
  • The chances of a majority Conservative government have increased, echoed by opinion polls that signal a 10-13 point lead for the Conservatives over Labour.
  • This has seen a stronger GBP, with the Pound at its strongest level versus the Euro for six months.
  • The FTSE 100 has underperformed European/ US stock indices given the negative repercussion for the UK benchmark average from Sterling strength.
  • Hong Kong has seen more violent demonstrations and responses from the authorities, which has had some only minimal negative impact on Asian (and global) stock markets.
Hong Kong protests
  • The impeachment enquiry into President Trump has moved into the public arena, but without noteworthy bearing on financial markets. But we still anticipate this impacting later in 2019 and into 2020.

Key this week

  • US-China trade talks
  • UK election campaign and opinion polls
  • Tensions in Hong Kong
  • US impeachment hearings.
  • Reserve Bank of Australia (RBA) Minutes Tuesday, People’s Bank of China (PBoC) interest rate decision and the FOMC Meeting Minutes both on Wednesday.
  • Data is light with Friday’s Japanese Consumer Price Index (CPI), German GDP and global Purchasing Managers Index (PMI) the main foci.
Date Key Macroeconomic Events
18/11/19 Nothing noteworthy
19/11/19 Reserve Bank of Australia Meeting Minutes
20/11/19 PBoC interest rate decision; Canadian CPI; FOMC Meeting Minutes
21/11/19 Nothing noteworthy
22/11/19 Japanese CPI; German GDP; global PMI data

Steve Miley

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

Comment on this video

Your email address will not be published. Required fields are marked *

Latest Related News

FTSE 100 forecast stays higher into Bank of England Meeting

The FTSE 100 Index chart has soared since late last week, benefiting from the certainty that has come from the UK general election result, with the 80-seat majority for the Conservative government.In addition, the latest surge higher in the FTSE 100 index this week has been assisted by the Pound recoiling from above 1.35 in the wake of concerns regarding the potential still for a… Continued

FTSE 100 surge leads European stock averages higher

A positive follow through for the UK benchmark averages on Monday, as the FTSE 100 led the European equity indices higher (see the UK FTSE 100 Index Chart, the German DAX Index chart and the Euro STOXX 50 Index chart and commentary)This has reflected a positive follow-through for the UK market after last week’s election result, which saw the Conservative party secure an 80-seat majority.This… Continued

Trade talks and UK election result affirm “risk on” theme

Markets began last week on a positive footing after the strong US Employment report the prior Friday (6th), as we highlighted in our Macro Watch report last week, with the November Non-Farm Payroll data particularly strong at 266K jobs added (expectations of 187K) and the Unemployment rate at 3.5%, matching the lowest jobless rate since 1969.Stock markets globally were further buoyed on Tuesday with the… Continued

Pound is in breakout mode (GBP)

The UK election is over, the Pound is in breakout mode against a variety of currencies (GBPUSD, EURGBP, GBPCHF, GBPAUD, GBPNZD, GBPCAD).US Dollar in bigger range highlighted by the US Dollar Index (DXY) Continued

Dax, EuroStoxx and FTSE 100 forecasts

Dax Dax 30 December futures Dax topped exactly at 13180/13200 (sorry typo yesterday) but it is unlikely you had a chance to short before the sell off to 13110/090. Outlook is quite negative for today. 10 Dec, 2019 Dax it is worth trying shorts at 13180/13200 with stops above 13220. A break higher is a buy signal targeting 13250 before the recovery high at 13365/375.… Continued

Forex Brokers in your location