Morning Commentary: A New Week – More of the Same

A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.

A New Week – More of the Same Share this story: Alan Rose Foreign Exchange Head Trader

The markets are beginning this new week right where we left off from last week - extremely fearful. There are so many issues creating uncertainty that are roiling the markets and at the same time creating extreme volatility and whip-saw price action that these issues are continuing to send investors and traders into cash or to the sidelines. Exacerbated trade tensions between the two biggest economies in the world combined now with the political repercussions of the arrest of the CFO of Huawei Technology from China have added another tension point for the markets.   Markets were in another deep dive in Asia on headlines that China had summoned both the U.S. and Canadian Ambassadors and were fearful of increased tensions and cessation of trade talks between the U.S and China. European markets followed suit, but for whatever reasons bottomed, and have been clawing their way back from extreme lows. At the moment, European stocks remain slightly in the red, G7 interest rates are mixed after being much lower in yield, commodity prices remain weak, and the DXY has regained its footing after being much lower.   This week will be another turbulent week for the markets as we see no end in sight to the uncertainty creating so many headwinds for the market. Looking at currencies, the DXY remains generally trapped as all the attention for now is focused on equities and interest rates. The British pound (GBP) is the weakest major currency today and the GBP is making new yearly lows; weak economic data today combined with heightened uncertainty about a Brexit vote this week and PM May’s standing have all put pressure on the GBP this morning. Continue to expect the unexpected, and importers and exporters should remain tactical. HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT: India’s central bank governor, Urjit Patel, unexpectedly resigned amid public clashes with the government as the government sought greater supervision of the functioning of the Reserve Bank of India. The Indian rupee has depreciated by nearly 0.75% against the U.S. dollar. The U.K. reported a much wider trade deficit for October and a much weaker industrial production number for October at -0.6% against expectations for a gain of 0.1%. U.K. interest rate yields are much lower.

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:

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 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 ©2018 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 NMLSR ID# 536994 | City National Bank Member FDIC