Here is what you need to know on Wednesday, November 20:
Trade: The US Senate has passed a law supporting pro-Democracy protests in Hong Kong, aggravating relations with China and weighing on sentiment. Beijing has summoned the US ambassador and called on the US to refrain from interfering. Commodity currencies are on the back foot. On the other hand, US Commerce Secretary Wilbur Ross has expressed optimism in getting a deal done with China.
UK Elections: Prime Minister Boris Johnson and Jeremy Corbyn have clashed in a televised debate which ended in a draw according to a snap poll following the event. GBP/USD has been falling toward 1.29 as Corbyn's satisfactory performance in comparison to his low approval rating is seen as helping him. Recent surveys have shown Johnson's Conservatives in the lead, markets preferred outcome. Fresh post-debate polls will be of interest.
Fed: The Federal Reserve's meeting minutes are set to shed to light on the late October meeting when the bank cut rates but signaled a pause. Markets are looking for hints about the hawk-dove divide within the world's most powerful central bank. See FOMC Minutes Preview: Reinforcing the rate pause
EUR/USD is consolidating below 1.11 as members of the European Central Bank continue speaking out. Phillip Lane, the bank's main economist, reiterated the ECB's view that no recession is on the horizon.
Canadian inflation figures are due out today and set to show an increase in monthly prices and stable core inflation.
Cryptocurrencies are seeking to find a bottom after long days of declines. Bitcoin has bounced off $8,000. See Bitcoin Falls to Fresh Lows Amid Google Push into Financial Services.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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