A deadline for U.S. tariff hikes approaches. Six weeks had passed since the “phase one” deal was agreed in principle yet the progress is sluggish.
Last week, mixed messages from China about the trade war gave risk appetite only a limited boost. Conflicting headlines about trade deal left markets almost unmoved.
Beijing has reportedly invited top U.S. negotiators to talks. Keeping hopes for a breakthrough in trade talks alive was the weekend announcement of Chinese plans for improving protection of intellectual property rights. Was this a move to address a sticking point between the parties?
The US accuses China of allowing intellectual property theft and forcing U.S. companies to share their technology with Chinese counterparts. China denies such practices and is reluctant to make sweeping legal changes.
U.S. national security adviser said on Saturday that an initial trade agreement with China is still possible by the end of the year. This came a day after U.S. President Donald Trump and Chinese President Xi Jinping expressed a desire to sign an initial trade deal.
Still, concern remains that events in Hong Kong could overshadow trade talk progress. Beijing might call top U.S. negotiators off if President Trump signs into law a bill supporting Hong Kong’s pro-democracy protesters. The city has been rocked by more than five months of anti-government protests. Beijing has already reacted angrily to the passage of U.S. legislation backing protesters. This legislation has cleared Congress but has not been endorsed by President Donald Trump yet.
The EUR/USD enjoyed a quiet week and posted slight gains. The upcoming week features manufacturing and services PMIs.
USD/CAD recorded weekly gains for the third time in the past month. The upcoming week features GDP.
The swings continue for GBP/USD. The pair reversed directions and lost ground last week.
LQDFXperts – The week ahead – Sluggish Progress on trade talks
- On Monday (25.11) German IFO Business Climate survey for November is lined up for release. A minor improvement may be seen in the report. IFO index is expected to rise slightly to 95.0 versus 94.6 previous.
- On Tuesday (26.11) the Conference Board (CB) Consumer Confidence, which measures the level of consumer confidence in economic activity, will be released. It has been dropping from the record highs but remains robust.
- On Wednesday (20.11) the Bureau of Economic Analysis will release the USD GDP. According to the first release of third-quarter Gross Domestic Product, the economy grew by 1.9% annualized.
- On Friday (29.11 Flash readings of euro zone inflation due will surely top new ECB chief Christine Lagarde’s must-watch list. The Eurozone’s flash inflation estimates cover the inflation data for the month of November. No major changes are expected. According to the European Commission’s forecasts, inflation in the Eurozone is expected to average around 1.0% for 2019. Canada will be releasing the monthly GDP figures as well.
Follow this week’s economic calendar.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, CNBC, FX street