Forex-novosti i prognoze od 24-01-2020

On Monday. at 09:00 GMT, Germany will present the IFO business environment indicator, the IFO current situation assessment indicator, and the IFO economic expectations indicator for January. At 09:30 GMT, UK will announce a changes of mortgage approvals for December. At 15:00 GMT, the US will report changes of new home sales for December.

On Tuesday, at 00:30 GMT, Australia will release the NAB business confidence index for December. At 07:00 GMT, Switzerland will announce a change of trade balance for December. At 11:00 GMT, UK will release retail sales index (according to the Confederation of British Industrialists) for January. At 13:30 GMT, the US will report a change of durable goods orders for December. At 14:00 GMT, the US will present the S&P/Case-Shiller home price index for November, and at 15:00 GMT, the consumer confidence indicator and the Richmond Fed manufacturing index for January.

On Wednesday. at 00:30 GMT, Australia will present the consumer price index for the 4th quarter. At 05:00 GMT, Japan will release a consumer confidence indicator for January. At 07:00 GMT, Germany will release GfK consumer confidence index for February. At 09:00 GMT, Switzerland will publish an index of expectations of Swiss investors, according to data from ZEW and Credit Suisse for January. At 09:00 GMT, the eurozone will announce changes in the aggregate M3 of money supply and the volume of private sector lending for December. At 13:30 GMT, the US will announce a change in the balance of foreign trade in goods for December. At 15:00 GMT, the US will report a change in the volume of pending home sales for December, and at 15: 30 GMT- a change in oil reserves. At 19:00 GMT in the US, the FOMC's interest rate decision will be announced. At 19: 30 GMT FOMC will hold a press conference. At 21:45 GMT, New Zealand will announce a change in the foreign trade balance for December.

On Thursday, at 00:30 GMT, Australia will release the import price index for the 4th quarter. At 08:00 GMT, Switzerland will publish a leading economic indicators from KOF for January. At 08:55 GMT, Germany will announce changes in the unemployment rate and the number of unemployed for January. At 10:00 GMT, the eurozone will report the change in the unemployment rate for December, as well as the consumer confidence index, the economic sentiment index, the business optimism index in industry and the business sentiment index for January. At 12:00 GMT in the UK, the Bank of England's interest rate decision will be announced. At 13:00 GMT, Germany will release the consumer price index for January. At 13:30 GMT, the US will announce changes in the number of initial applications for unemployment benefits for the past week and the volume of GDP for the 4th quarter, as well as release the price index of GDP for the 4th quarter. At 23:30 GMT, Japan will present the consumer price index in the Tokyo region for January and announce the change in the unemployment rate for December. At 23:50 GMT, Japan will report changes in retail trade and industrial production for December.

On Friday. at 00:01 GMT, UK will release the GfK consumer confidence indicator for January. At 00:30 GMT, Australia will present the producer price index for the 4th quarter and announce changes in private sector lending for December. At 01:00 GMT, China will publish the manufacturing PMI and non-Manufacturing PMI for January. At 05:00 GMT, Japan will report changes of housing starts for December. At 06:30 GMT, France will announce the change in GDP for the 4th quarter. At 07:30 GMT, Switzerland will announce a change in retail sales for December. At 07:45 GMT, France will report changes in consumer spending for December and release the consumer price index for January. At 09:30 GMT, UK will announce changes in net loans to individuals, the M4 money supply aggregate, and the number of approved mortgage applications for December. At 10:00 GMT, the Eurozone will announce the change in GDP for the 4th quarter and release the consumer price index for January. At 13:30 GMT, Canada will report the change in GDP for November, and will publish the producer price index for December. Also at 13: 30 GMT, the US will announce changes in personal income and expenses for December. At 14:45 GMT, the U.S. will present the Chicago purchasing managers ' index for January, and at 15:00 GMT - the Reuters/Michigan consumer sentiment index for January. At 18:00 GMT, in the US, Baker Hughes will release an oil rig count report.

FXStreet reports that analysts at Rabobank note "the consensus view is that AUD/USD will move higher this year, extending the choppy upward bias that was in place between October and December." 

"In view of Australia’s trade links, the AUD is sensitive to the growth outlook in China and it is likely that the market’s optimistic outlook on the AUD was drawn from the completion of the Phase 1 trade deal between the US and China. Additionally, it is likely assumed that the appearance of some better data releases in the US will lift global growth prospects and add a buoyancy to risk appetite. We see significant risks to this view based on both on international and domestic factors and continue to expect AUD/USD to end the year at weaker levels."

"If consumer caution returns, there is a strong likelihood that the strength of the November retail sales data gives way to weak results for December and January. A poor month for consumers could be compounded by the impact of bush fires and smoke pollution. It is not wholly unsurprising that surveys indicate that consumer confidence dropped into the start of this year."

"Another risk for the Australian economy and the AUD is the potential for trade tensions between the US and China to rise again - impacting the outlook for Chinese growth. An economic impact from China’s coronavirus could also have negative implications for the AUD. Even if the RBA decides to stand pat on policy on February 4, the door for further easing is likely to be left wide open. We see risk of AUD/USD dropping toward 0.65 on a 12 month view."

According to ActionForex, analysts at RBC Financial Group notes that a 0.9% tick up in Canada's retail sales in November "breaks a string of generally softer economic data for the month after disappointing manufacturing and wholesale reports earlier this week". 

"It would take more reports like this one to really alter what have been lackluster trends in the retail sector, though. Excluding price impacts, volume sales were still unchanged from a year ago in November (despite a 0.7% month-over-month increase). Overall consumer spending trends have probably still been a bit stronger than that – the retail sales numbers do not include spending on services (which are more than half of consumer spending). And the headline retail sales numbers also exclude a portion of e-commerce sales, which slowed in November but are still running stronger than headline retail sales at +6.6% year-over-year in November. Households are clearly also willing to spend more on real-estate with housing markets in BC and Ontario, in particular, showing signs of heating up again.

Still, domestic growth concerns are once again front and center at the Bank of Canada, despite what looks like a less-worrying external backdrop with the US and China agreeing to hit pause in their ongoing trade war. Overall economic activity (i.e. GDP) looks like it increased little if at all in Q4. Some of that softness, but not all, is due to transitory factors. The central bank will rightly be more focused on economic data releases until it becomes clear whether recent faltering is a sign of underlying fundamental deterioration, or yet another statistical blip in what is often volatile Canadian economic data."

Preliminary data released by IHS Markit on Friday pointed to a faster expansion in business activity in January, which was driven by a sharper increase in the service sector output, while the growth of manufacturing production was unchanged.

According to the report, the Markit flash manufacturing purchasing manager's index (PMI) came in at 51.7 in January, slightly down from 52.4 in December. That was the lowest value since last October. Economists had expected the reading to edge up to 52.5. A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction. According to the report, new business growth was only marginal in January, while output continued to rise at a moderate pace and employment increased at the slowest pace for four months.

Meanwhile, the Markit flash services purchasing manager's index (PMI) climbed to 53.2 this month, from 52.8 in the prior month. The latest reading was the highest one since last March. Economists had expected the reading to increase to 52.9. According to the report, employment increased at a quicker rate and business optimism reached a seven-month high, but the expansion in new orders moderated slightly.

Overall, IHS Markit Flash U.S. Composite PMI Output Index came in at 53.1 in January, up from 52.7 in December, signaling the quickest rise in output since last March.

Commenting on the flash PMI data, Siân Jones, an economist at IHS Markit, noted: "The recovery of growth momentum across the U.S. private sector continued to quicken at the start of 2020, with overall output rising at the sharpest pace since last March. Nonetheless, the underlying data highlights a manufacturing sector that is not out of the woods yet, with goods producers seeing only modest gains in output and new orders. Service providers also registered a slower upturn in new business, which fed through to softer increases in output charges as part of efforts to attract new customers."

FXStreet reports that according to Jacqui Douglas, Chief European Macro Strategist at TD Securities (TDS), the bounce in the January UK PMIs was stronger than expected for both manufacturing and services, leaving next week's BoE rate decision as a real toss-up.

“This morning's PMI data surprised to the upside, with the manufacturing PMI rising to 49.8, its strongest level since April, and the services PMI recording a solid jump to 52.9, its highest level since September 2018.”

“The nearly 3pt gain in the services PMI was its largest m/m jump since the post-referendum rebound in August 2016, which had followed a nearly equally-large decline in July 2016. The details of the survey were upbeat as well, most notably with business optimism hitting its highest level since June 2015, a year before the EU referendum.”

“We maintain our call for a 25bps rate cut next week, but believe that the odds of that cut are close to 50%. It will almost certainly be a fairly split vote either way, as MPC members put differing weights on the hard data versus the survey data.”

U.S. stock-index futures rose on Friday, as upbeat earnings reports from Intel (INTC) and American Express (AXP) as well as encouraging business activity data out of Europe lifted the mood of investors, closely watching latest reports about the coronavirus outbreak.

Global Stocks:

FXStreet reports that Danske Bank analysts note: "Fears about the spread of the so-called coronavirus in China weighed on financial markets this week." 

"In particular, Chinese stocks and currency took a big hit. US and German bond yields also declined and both oil and metal prices pushed lower."

"The count of people infected with the virus continued to rise over the week, from 440 on Monday to 869 on Friday. The number of people who have died from the disease increased from five on Monday to 26 on Friday."

"The virus is similar to the SARS virus in 2003, which infected 8,000 people across Asia and some other countries and resulted in the death of 770 people before the disease was contained after three to four months. China has acted faster this time and is co-operating with the World Health Organisation but it is still unclear how much it could spread."

"A concern is the Chinese New Year holiday, which starts today, as it normally involves hundreds of millions of people travelling to their hometowns to celebrate the New Year with their families. We probably will not know how serious the spread of the virus is until we get to the other side of the New Year."

(company / ticker / price / change ($/%) / volume)

Walmart (WMT) initiated with a Hold at Odeon; target $105

Ford Motor (F) resumed with a Neutral at JP Morgan; target $10

Apple (AAPL) target raised to $400 from $350 at Wedbush

Apple (AAPL) target raised to $350 at Cowen

Intel (INTC) target raised to $64 from $55 at Cowen

Intel (INTC) downgraded to Sell from Hold at Loop Capital; target raised to $59

Statistics Canada reported on Friday that the Canadian retail sales surged 0.9 percent m-o-m to CAD51.48 billion in November, following a revised 1.1 percent m-o-m decline in October (originally a 1.2 percent m-o-m drop). That represented the largest advance in retail activity since March.

Economists had forecast a 0.4 percent m-o-m increase for November.

According to the report, the November increase was primarily attributable to higher sales at motor vehicle and parts dealers (+3.0 percent m-o-m) and at food and beverage stores (+0.9 percent m-o-m), both of which were down in October. In addition, sales at building material and garden equipment and supplies dealers (+2.1 percent m-o-m) recorded their first gain in the last five months, and sales at gasoline stations (0.2 percent m-o-m) edged up, reflecting in part higher prices at the pump.

Excluding motor vehicle and parts dealers, retail sales rose 0.2 percent m-o-m in November compared to a revised 0.4 percent m-o-m fall in October (originally a 0.5 percent m-o-m drop) and economists' forecast for a 0.4 percent m-o-m advance. Excluding motor vehicle and parts dealers and gasoline stations, retail sales also went up 0.2 percent m-o-m in November.

In y-o-y terms, Canadian retail sales climbed 1.9 percent in November, following a 0.6 percent decrease in October.

American Express (AXP) reported Q4 FY 2019 earnings of $2.03 per share (versus $1.84 per share in Q4 FY 2018), beating analysts' consensus estimate of $2.01 per share.

The company's quarterly revenues amounted to $11.365 bln (+8.5% y/y), roughly in line with analysts' consensus estimate of $11.358 bln.

AXP rose to $134.70 (+2.53%) in pre-market trading.

Intel (INTC) reported Q4 FY 2019 earnings of $1.52 per share (versus $1.28 per share in Q4 FY 2018), beating analysts' consensus estimate of $1.25 per share.

The company's quarterly revenues amounted to $20.200 bln (+8.3% y/y), beating analysts' consensus estimate of $19.232 bln.

The company issued upside guidance for Q1 FY 2020, projecting EPS of $1.30 (versus analysts' consensus estimate of $1.03) and revenues of $19.0 bln (versus analysts' consensus estimate of $17.19 bln).

Ii also issues upside guidance for FY 2020, projecting EPS of $5.00 (versus analysts' consensus estimate of $4.65) and revenues of $73.5 bln (versus analysts' consensus estimate of $72.15 bln.

INTC rose to $66.37 (+4.82%) in pre-market trading.

In today's European trading, EUR fell against most major currencies as flash PMI data for Germany and Eurozone did not impress the market participants. IHS Markit's report revealed that Eurozone's private sector expanded in January 2020 at a similar pace as in December 2019. Eurozone Composite PMI came in at 50.9 in January, unchanged from the previous month and missing economists' forecast for 51.2. A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction. The overall expansion in business activity was again centered on the service sector, which, however, rose at a slightly weaker pace than in December (Flash Eurozone Services PMI was at 52.2, down from 52.8 in December). Meanwhile, manufacturing production remained in contraction, but the rate of decline eased to the softest in five months (Flash Eurozone Manufacturing PMI was at 47.8, down from 46.3 in December). In a separate report, IHS Markit announced that Germany's private sector gained momentum in January as services activity expanded at the fastest rate in five months, while a pace of decline in manufacturing slowed to the weakest level since August last year. Flash Germany Composite Output Index stood at 51.1 at the start of the year, up from 50.2 in December. That was the highest reading since August 2019. 

In addition, EUR continues to see pressure after the ECB did not make any policy change on Thursday. ECB President Christine Lagarde said yesterday that the central bank sees signals of a moderate increase in core inflation, while downside risks to the Eurozone economy have become less pronounced. Lagarde's statements were taken by traders as a signal that the ECB will stick to the previous course of monetary policy. She called on Eurozone countries to "significantly step up" structural reforms, which, according to experts, may signal the Central Bank's reluctance to change policy in the near future.

Elsewhere, USD/CAD traded above a 1.3100-level ahead of the release of Canada's retail sales data. Economists expect to see a rebound of 0.4% m/m for November after a 1.2% m/m decline in October.

AUD weakened against USD, correcting after Thursday's advance, which was triggered by strong jobs data out of Australia.

FXStreet reports that with employment growth picking up pace in November/December, the Reserve Bank of Australia is unlikely to cut interest rates in February. However, the employment growth is likely to slow over the first half of 2020, forcing the central bank to take action, ANZ analysts mentioned in their weekly research note. 

"The drop in unemployment over the later part of 2019 is a surprise given the slowdown in growth. The link with economic growth makes it difficult to think that employment can continue to be as strong as it was over November/December.

As such we think the RBA is still likely to ease further.

We no longer expect a rate cut in February. We think the Bank will want to see data on consumer spending over Q4 and January before acting. 

April is the likely date for the next rate cut, with another a few months later. We see the cash rate at 0.25% by the end of the third quarter at the latest."

FXStreet reports that based on their Non-FDI (Foreign Direct Investment) tracker, analysts at Standard Chartered recently said that capital outflow from China followed the historical pattern of picking up on a seasonal basis.

"Our tracker suggests that China registered non-FDI capital outflows of USD 27.1bn in December, slightly higher than USD 24.7bn in November, following the historical pattern, despite a stronger currency.

Non-FDI capital outflows rose to USD 192bn in 2019, compared with outflows of USD 108bn in 2018, against a backdrop of external uncertainty and currency depreciation.

Exports soared 7.6% y/y in December partly on seasonal and base effects. The early occurrence of Lunar New Year in 2020 may have led to the front-loading of trade activity. The announcement of phase-one deal also likely boosted market sentiment.

The trade surplus expanded to USD 46.8bn from USD 37.6bn in November, and the services trade deficit widened to c.USD 22bn, according to our estimates.

Banks registered their first monthly net FX settlement (i.e., net buying of FX from clients) since May 2019, as per State Administration of Foreign Exchange (SAFE) data.

While the incentive to hold FX increased, demand for purchasing FX eased in December."

FXStreet reports that Prashant Newnaha, Senior Asia-Pacific Rates Strategist at TD Securities, offered a sneak peek at what to expect from February’s Reserve Bank of Australia’s (RBA) monetary policy decision.

“Yesterday's Dec employment number provides the RBA an out from cutting next month, following a number of positive, but limited series of data prints.

The weak details from Q3 GDP suggest RBA forecasts could be cut in the Feb SoMP, but the RBA may draw comfort from recent data and improving offshore sentiment, potentially limiting SoMP downgrades.

We have little insight into the RBA's reaction function. However, the drop in the unemployment rate and improving global outlook tilt the balance in favour of the RBA remaining on hold in Feb. April is lining up as the next likely month the RBA could cut.”

FXStreet reports that analysts at Nordea Markets offered a quick review of Friday's mixed Eurozone PMI prints for January, which did not show much change in momentum at the start of the year.

“The euro area PMIs showed a mixed picture in January. The composite index stood unchanged at 50.9, below consensus. The various sectors and industries are sending mixed messages this month.”

“The manufacturing index came in on the strong side of expectations, at 47.8. Nonetheless, the industry still clearly remains in contractionary territory but gives some signs of improvement as the decline of new work is slowing.”

“The services index on the other hand actually deteriorated to 52.2 from 52.8 last month, against expectations, but still supports the view of a resilient service sector, keeping the economy afloat and driving job creation.”

“Recent optimism around easing trade tensions after the phase one deal between China and the US reflected in financial markets did not take hold in this month’s PMIs. The threat of the US targeting the Euro area in its next trade war measures can put a damper on sentiment this year, but should not stand in the way of a gradual recovery.”

• We are not seeing transmission from wages to inflation yet
• We are seeing inflation moving a teeny, tiny little bit but this is really minor
• It would take much higher numbers to actually change the picture fundamentally
  
  

• Notes core inflation remains low
• Still far away from 2% inflation target
• Says Japanese domestic demand fairly strong
• Expects strength in business investment to continue
• Says negative rates for a long time may mean side effects for the banking system
• We have not seen any financial bubbles so far
  

FXStreet reports that Morten Lund, Analyst at Nordea Markets, offered his view on the latest UK PMI figures and expect that the Bank of England will be on hold next week.

"Both Manufacturing and Services increased, with the latter bouncing the most. This should be comforting news as the service sector is by far the biggest in the UK. Moreover, forward-looking indicators such as New Orders improved significantly."

"We think a reading of 52.0 was needed to keep the BoE firmly on hold. With today's numbers now showing an even bigger rebound, we stick to our forecast of the BoE being on hold at Governor Carney's last meeting."

"With that said next week's meeting will be a close call. Afterall, when the Bank comes out as dovish as the MPC members have been in the past weeks, there is usually "something about it". Markets now price in roughly a 45% probability of a rate cut next week."

FXStreet reports that in light of the recent performance in USD/JPY, FX Strategists at UOB Group suggested the pair now risks a move lower.

24-hour view: "USD moved in line with our view of that "a sustained push below the strong support at 109.30 is not expected" with an overnight low of 109.25 followed by a strong rebound to close 109.49. For today, a sideways pattern is expected, between 109.15 and 109.70."

Next 1-3 weeks: "The breach of 109.45 (low: 109.25) overnight has indicated that the current USD strength has run its course and the risk now shifts to the downside. The next strong support is at 109.15 followed by the big figure 109.00 which is unlikely to come into the picture as yet. On the topside, immediate resistance is in the vicinity of overnight highs at 109.86 and only a further recovery above 110.00 would indicate that the current phase of weakness has ended."

Results of its latest ECB survey of professional forecasters:

• 2020 inflation seen at 1.2% (previously 1.2%)

• 2021 inflation seen at 1.4% (previously 1.4%)

• 2022 inflation seen at 1.5%

• 2020 real GDP growth seen at 1.1% (previously 1.0%)

• 2021 real GDP growth seen at 1.2% (previously 1.3%)

• 2022 real GDP growth seen at 1.4%

FXStreet reports that analysts at Nordea Markets offered a brief preview of the upcoming FOMC policy decision and expect the Fed to be on hold and reiterate its data dependence.

"The overall tone of the meeting will probably be close to the December meeting, where the FOMC said it sees the economy being in a good place and that the uncertainties related to the trade war and Brexit have faded."

"Still, the Fed will not yet declare complete victory against external uncertainties by saying that risks are skewed to the downside. The "Fed put" is not dead."

"The strong downward signal from leading indicators is also why stick to our forecast of another rate cut in March. Admittedly, however, our forecast looks a bit stretched, as FOMC members have not sent that dovish signals lately while markets also do note price in a cut."

"For our March cut to materialize, we would need to see some bad upcoming macro data in particular ISM Non-Manufacturing / nonfarm payrolls or financial conditions tightening too much."

"As Powell will likely signal that the Fed is in a wait-and-see mode, the market reaction related to the "pure" monetary policy outlook should be muted. If anything, however, we see risks tilted towards lower yields as Powell will probably keep the "Fed put" alive, while markets price in a (too) low probability of easing in H1 2020, in our view."

January data from the IHS Markit / CIPS Flash UK Composite PMI highlighted a decisive change of direction for the private sector economy at the start of 2020. Business activity expanded for the first time in five months, driven by the sharpest increase in new work since September 2018.

The seasonally adjusted Flash UK Composite Output Index - which is based on approximately 85% of usual monthly replies - rose to 52.4 in January, from 49.3 in December. As a result, the headline index registered above the crucial 50.0 no-change mark for the first time since August 2019. The latest reading was the highest for almost one and-a-half years and signalled a moderate expansion of business activity across the UK private sector economy. There were widespread reports that reduced political uncertainty following the general election had a positive impact on business and consumer spending decisions at the start of the year. In addition, business optimism reaching its highest level since June 2015. Survey respondents often commented on hopes that an end to domestic political indecision will have a favourable impact on business investment and help to sustain a more favourable economic landscape.

Manufacturing PMI

At 49.8 in January, the seasonally adjusted Flash UK Manufacturing PMI picked up from 47.5 in December and was the highest since since April 2019. Economists had expected an increase to 48.9.

Services PMI

The seasonally adjusted Flash UK Services PMI posted 52.9 in January, up sharply from 50.0 in December and the highest reading since September 2018. Economists had expected an increase to 51.0.

According to the report from IHS Markit, flash PMI data for January indicated that the eurozone economy failed to pick up growth momentum at the start of 2020. Business activity increased at the same slight pace as was seen in the final month of 2019 as the rate of expansion in new orders remained muted. Underlying data showed that growth of services activity eased slightly, while the manufacturing sector moved closer to stabilisation. Combined growth of the 'big-2' eurozone economies picked up, but this was offset by near-stagnation across the rest of the single-currency area.

The 'flash' Eurozone Composite PMI was unchanged at 50.9 in January, signalling a further muted increase in activity across the euro area economy. The rate of expansion has remained broadly stable since the start of the final quarter of 2019, running at the weakest for around six-and-a half years. The overall expansion in business activity was again centred on the service sector (Flash Eurozone Services PMI at 52.2 (52.8 in December). 2-month low). That said, services activity rose at a slightly weaker pace than in December. Meanwhile, manufacturing production remained in contraction, but the rate of decline eased to the softest in five months (Flash Eurozone Manufacturing PMI at 47.8 (46.3 in December). 9-month high).

According to the report from IHS Markit, January saw a welcome, albeit modest, upturn in business activity across Germany's private sector,

Flash Germany Composite Output Index - which tracks the combined change in activity across the country's manufacturing and service sectors, and is based on approximately 85% of usual monthly replies - registered 51.1 at the start of the year, up from 50.2 in December and its highest since last August. Other positive developments highlighted by the survey in January included a return to growth of new orders, a faster rate of job creation and improved business confidence towards the outlook for activity over the coming year.

Data at the sector level showed growth of services business activity accelerating to a strong rate that was the fastest for five months, alongside an easing of the rate of decline in manufacturing production to the weakest since August last year.

The headline Flash Germany Manufacturing PMI climbed to an 11 month high of 45.2 in January, up from December's 43.7. The latest reading was still firmly in contraction territory, but signalled the overall rate of decline in manufacturing easing for the third time in the past four months.

Firms' expectations towards output over the coming year improved to a 16-month high in January. While service sector sentiment showed a modest gain to reach the highest since last April, the main boost to overall business confidence came from a jump in manufacturers' expectations, which were the most positive in almost one-and-a-half years.

The German finance minister said he isn't pessimistic over threats of tariffs on the car industry as he believes an agreement on free trade and digital taxes is possible, CNBC reports.

Soon after calling for a fresh trade deal with the European Union, President Donald Trump raised the specter of car tariffs should European nations implement a digital tax on big U.S. tech firms.

But Germany's Olaf Scholz told CNBC that he believes a free trade agreement with the United States will happen and he wasn't gloomy about the threat of tariffs.

"No, not really. I think we know that there is a need for debating about trade," said Scholz, adding that people "could be confident" that EU proposals currently on the table would lead to a deal.

"In the end, we know that trade is most successful if there are not too many barriers," he added.

Scholz said the digital tax, which would impact companies like Amazon, Google and Facebook, should be agreed globally and he expected an international proposal to come from the OECD in early 2020.

FXStreet reports that Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, noted that the pair's focus seems to have now shifted to the 1.0980 zone.

"EUR/USD has eroded the 3 month uptrend. The intraday Elliott wave signals remain slightly negative and this leaves attention on the downside to initially the 1.0981 29th November low. More importantly it has neutralised our bullish bias and forced us once again to the sidelines."

"Overhead the market is facing tough resistance at 1.1184-1.1240 - namely the 55 week ma, the 2019-2020 down channel and the recent high. This guards the 200 week ma at 1.1359, which continues to represent a critical breakpoint medium term."

In today's Asian trading, the US dollar rose slightly against the euro and strengthened slightly against the yen.

The euro falls for the second consecutive session after the European Central Bank (ECB) meeting. ECB President Christine Lagarde said yesterday that the Central Bank sees signals of a moderate increase in core inflation, while downside risks to the Euro zone economy have become less pronounced.

The ECB did not change its key interest rates and asset buyback program, and announced the start of the first review of the Central Bank's strategy since 2003, which will last a year.

Lagarde's statements were taken by traders as a signal that the ECB will stick to the previous course of monetary policy. She called on Eurozone countries to "significantly step up" structural reforms, which, according to experts, may signal the Central Bank's reluctance to change policy in the near future.

The yen fell by 0.05% against the US dollar, but has risen by about 0.6% since the beginning of the week. Experts expect it to strengthen further due to the continued demand for safe Harbor assets in the face of the spread of a new type of pneumonia.

eFXdata reports that ANZ Research revisit the impact of SARS on AUD rates in 2003.

The outbreak of a coronavirus strain in the Chinese city of Wuhan has prompted a number of questions about the impact of the SARS virus on Australia in 2003. We've taken a look at what happened to the AUD rates market over that year. In undertaking this exercise, we are in no way implying that we think the Wuhan outbreak will unfold in anything like the same manner as SARS.

"In looking through the rate charts for that year, what stands out is the sell-off that took place in the week or two immediately following. For a market that was used to rates being a safe-haven from deflationary shocks, this seems difficult to understand. We expect the market reaction to a SARS-like event would be very different now," ANZ notes.

'The WHO declared a global alert on 12 March. Interestingly, this coincided with an upward spike in front-end pricing. This may, to some extent, have reflected the weakening of the AUD that occurred as a consequence of the WHO alert. Having said this, we note that the US front-end sold-off sharply in the immediate aftermath of the WHO alert Indeed, the moves by both markets were very similar which implies the AUD move wasn't really a factor,," ANZ adds.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1207 (3207)

$1.1166 (2214)

$1.1133 (1214)

Price at time of writing this review: $1.1046

Support levels (open interest**, contracts):

$1.1029 (2676)

$1.0991 (1747)

$1.0946 (927)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 7 is 55085 contracts (according to data from January, 23) with the maximum number of contracts with strike price $1,1350 (4634);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3251 (1270)

$1.3221 (1001)

$1.3197 (1733)

Price at time of writing this review: $1.3132

Support levels (open interest**, contracts):

$1.3041 (2658)

$1.3010 (1166)

$1.2974 (3202)

Comments:

- Overall open interest on the CALL options with the expiration date February, 7 is 24749 contracts, with the maximum number of contracts with strike price $1,3600 (3936);

- Overall open interest on the PUT options with the expiration date February, 7 is 21724 contracts, with the maximum number of contracts with strike price $1,3000 (3202);

- The ratio of PUT/CALL was 0.88 versus 0.88 from the previous trading day according to data from January, 23

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.