Morning Commentary: Is the Glass Half Full or Half Empty?

Foreign Exchange - Morning Commentary
Is the Glass Half Full or Half Empty?
Share this story:
Facebook
Twitter
LinkedIn
Email
Alan Rose
Alan Rose
Foreign Exchange Senior Trader
Global equity markets remain positive and upbeat and see a silver lining in almost all headlines and data releases. The U.S. and global bond markets remain less confident and are lagging behind equity performance; it had led equity performance earlier this year. The U.S. dollar weakened late last week as all safe haven currencies did, and it appears to be trapped in a new range.

Markets remain hopeful that the U.S. and China will find more positive common ground concerning trade in the weeks and months ahead. The U.S.-China trade deal announcement from Friday was underwhelming with no concrete written agreement and only promises to further define “phase one” in the weeks ahead. Even though Friday’s announcement was disappointing to many in the market, equity markets remain hopeful for a reduction in tensions down the road.

Adding to the market uncertainty is the new and increased tension between Turkey and the U.S. Turkey has taken full advantage of the vacuum created by President Trump’s removal of U.S. troops along the Turkey-Syrian border, and the U.S. finally applied economic sanctions on Turkey yesterday. While the Turkish lira weakened late last week and on Monday in anticipation of economic sanctions, the currency has rallied today as the sanctions appear to be less punitive than the market had anticipated.

Finally, the U.K. reported a dismal jobs report for the three-months ending in August where employment fell by 56,000 against expectations of a gain of 26,000. This was the first decline in employment since November 2017. The UR rate also rose to 3.9%. While U.K. interest rates are lower, the British pound is outperforming today on the back of continued headlines supporting progress regarding Brexit discussions and negotiations.

For all of those who follow markets, beauty is in the eye of the beholder and when one person sees the glass half empty, another sees the glass half full. Continue to expect the unexpected.
HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT:
  • Yesterday, China reported its trade balance for September. Markets had anticipated the trade surplus to fall but it instead grew sharply. While exports declined by 3.2%, imports fell sharply by 8.5% reflecting weakening domestic demand and allowing for the surplus to increase. Chinese exports to the U.S. fell by 22% after falling by 16% in August but were offset by positive exports to the EU and Southeast Asian countries. The Chinese yuan is weaker today after strengthening late last week.
If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133.
Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!
Follow City National Bank on social media:
Facebook Twitter LinkedIn Google Plus YouTube
Non-deposit investment products:
Are not FDIC insured,
Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and
Are subject to investment risks, including possible loss of the principal invested.
This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.
Unsubscribe from this list  |  Update email preferences
This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list.
Copyright ©2019 City National Bank – All Rights Reserved.
350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071
City National Bank is a subsidiary of Royal Bank of Canada.
TERMS & CONDITIONS  |  PRIVACY STATEMENT
Equal Housing Lender
NMLSR ID# 536994 | City National Bank Member FDIC
                                                           

Comments

Popular posts from this blog

Are tax hikes coming?