Morning Commentary: He Said, Xi Said

Foreign Exchange - Morning Commentary
He Said, Xi Said
Share this story:
David Atkinson
David Atkinson
Foreign Exchange Sales Manager
There are conflicting reports this morning as to whether or not there is significant movement on a trade deal, or at least the beginning of one.  A Bloomberg story overnight reported that President Trump wants to reach a deal with China at the G20 summit later this month, and indeed, the President did tweet about a phone call with Chinese President Xi Jinping on Thursday, saying that trade talks are "moving along nicely."  A senior administration official, according to CNBC, disputed that notion of such positive movement on trade.  My take is that the truth lies somewhere in the details.  It is hard to see how this could get wrapped up so quickly this month, but it may be at least in someone's draft.

Before that market-moving sequence of events, you could be forgiven for expecting a dire repeat of the equity action in October.  Apple released earnings last night with disappointing guidance, and the stock dropped in after-hours trading.  When this happened with other big tech companies last month, we saw blood spilled in Asian, European and then U.S. equity markets.  Instead, we got strong stock gains around the world overnight that led into U.S. trading hours.

The much-anticipated non-farm payrolls print for October was unambiguously strong but left markets with mixed emotions.  The headline number showed a gain of 250K for October against expectations of around 200K.  The unemployment rate stayed at 3.7% as expected, but average hourly earnings jumped 3.1% YoY, the biggest jump since 2009, clearly keeping the Fed on its tightening path.  Pre-market equity trading eased off as the early morning went on, but I tend to believe that equity markets are more focused on China and tariffs than wage pressures, at least for now.

The U.S. dollar is overall softer again today as risk assets rally.  In particular, Asian currencies are strong this morning on the hopes of an ease in trade tensions.  Speaking of trade, lost in all this is news about the September trade deficit, which widened to -$54 billion from the previous reading of $53.3 billion.  These days though, two-month old data is considered ancient with so much else happening right now.
  • Italian manufacturing declined the most in four years, as the euro-area manufacturing PMI came in below expectations and posted the weakest reading in two years.
  • Although not technically “overnight”, Canada’s jobs report disappointed with job gains of 11.2K against expectations of a 15K increase.
If we can help you with any Foreign Exchange needs, please email 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
Investment and Insurance Products:
Are Not insured by the FDIC or any other federal government agency
Are Not deposits of or guaranteed by a Bank or any Bank Affiliate
May Lose Value
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. The 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 Please do not reply to this email. To ensure the delivery of future emails, please add to your email address book or safe sender list.
Copyright ©2018 City National Bank – All Rights Reserved.
350 South Grand Avenue, Los Angeles, CA 90071
City National Bank is a subsidiary of Royal Bank of Canada.
Equal Housing Lender
NMLSR ID# 536994 | City National Bank Member FDIC


Popular posts from this blog

Fidelity: Bollinger band stock signal

Viewpoints: What to do after a data breach