Trump Announces 'Phase One' Of U.S.-China Trade Deal

Trading 11 oct 2019 Commentaire »

Following two days of closely watched trade talks, President Donald Trump told reporters on Friday that the U.S. and China have reached a "very substantial phase one deal."

Trump said the deal includes up to $40 to $50 billion in Chinese purchases of U.S. agricultural products as well as Chinese concessions on intellectual property and financial services.

In exchange for the concessions by China, the U.S. has agreed to hold off on an increase in tariffs originally scheduled for next week.

Trump said the agreement would take about three weeks to write and would likely be signed by both sides by the Asia-Pacific Economic Cooperation summit in Chile in November.

"Phase two will start almost immediately" after the first phase is signed, Trump said in an Oval Office meeting with China's lead negotiator, Vice Premier Liu He.

Trump made upbeat comments about the negotiations on Twitter earlier in the day, tweeting, "Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days."

Trump noted in a subsequent tweet that a potential trade deal with China would not have to go through the "very long and politically complex Congressional Approval Process."

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Crude Oil Futures Settle Sharply Higher On Positive Trade News

Trading 11 oct 2019 Commentaire »

Crude oil prices rose sharply on Friday on supply concerns after an Iranian oil tanker exploded in the Red Sea after being hit by missiles launched from the Saudi Arabian port of Jeddah.

Positive progress in U.S.-China trade negotiations too contributed to oil's sharp uptick.

West Texas Intermediate crude oil futures for November ended up $1.15, or about 2.2%, at $54.70 a barrel, the highest settlement in about two weeks.

On Thursday, West Texas Intermediate crude oil futures for November ended up $0.96, or 1.8%, at $53.55 a barrel.

For the week, crude oil futures gained about 3.6%.

The attack on Iranian oil tanker has raised concerns about possible supply disruptions from a crucial crude producing region.

According to Iranian news agencies, the ship owned by Iran's state-owned National Iranian Oil Co. suffered heavy damage and was leaking oil ino the water.

Oil prices also remained supported after OPEC said that it has all options in place to balance oil markets and that it would take a decision in December regarding supply.

Meanwhile, a report from Baker Hughes said the oil rigs count in the U.S. increased by 2 in the week ended October 11, the first increase in eight weeks. With this, the total rig count has increased to 712.

In trade news, the U.S. and China reached a tentative, partial agreement on Friday that may lead to a truce in the trade war, according to a Bloomberg News report, citing people familiar with the matter.

Under the pact, China would agree to some agricultural concessions, while the U.S. would provide some tariff relief, the report said.

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Treasuries Move Sharply Lower Amid Upbeat Comments About Trade Talks

Trading 11 oct 2019 Commentaire »

Treasuries moved sharply lower during trading on Friday, extending the notable downward move seen over the two previous sessions.

Bond prices came under pressure early in the session and remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped by 9.4 basis points to 1.752 percent.

The early slump by treasuries came as continued optimism about U.S.-China trade talks reduced the appeal of safe havens like bonds, with President Donald Trump making upbeat comments about the negotiations.

"Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days," Trump said in a post on Twitter. "I will be meeting with the Vice Premier today. All would like to see something significant happen!"

Trump noted in a subsequent tweet that a potential trade deal with China would not have to go through the "very long and politically complex Congressional Approval Process."

The tweets from Trump came after he told reporters on Thursday that the talks with China are going "really well."

"So, we just completed a negotiation with China. We're doing very well. We're having another one tomorrow. I'm meeting with the Vice Premier over at the White House," Trump said. "And I think it's going really well, I will say. I think it's going really well."

While Trump is almost always upbeat about talks with China, his remarks were backed up by a White House official, who told Reuters the talks had gone very well, "probably better than expected."

Treasuries remained firmly late in the session after a report from Bloomberg News said the U.S. and China reached a partial agreement Friday would broker a truce in the trade war and lay the groundwork for a broader deal.

People familiar with the matter told Bloomberg the deal would involve China agreeing to some agricultural concessions and U.S. providing some tariff relief.

Next week's trading may be impacted by any concrete developments out of the trade talks along with reports on retail sales, housing starts, and industrial production.

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Gold Futures Settle At Near 2-week Low

Trading 11 oct 2019 Commentaire »

Gold prices drifted lower on Friday as rising optimism about U.S.-China trade deal and easing worries about Brexit prompted investors to go in for riskier assets such as equities.

Dollar too lost ground, extending recent slide amid prospects for more monetary easing by the Federal Reserve in the near term.

The dollar index declined to 98.20 and was last seen at 98.28, down more than 0.4% from previous close.

Gold futures for December ended down $12.20, or about 0.8%, at $1,488.70 an ounce, after falling to a low of $1,478.00 around mid morning.

On Thursday, gold futures for December ended lower by $11.90, or 0.8%, at $1,500.90 an ounce.

For the week, gold futures shed about 1.6%.

Silver futures for December ended down $0.058, at $17.544 an ounce, while Copper futures for December closed up $0.0145, at $2.6280 per pound.

In economic news, Consumer prices in the U.S. were essentially flat in the month of September, according to a report released by the Labor Department on Thursday, with higher prices for shelter and food offset by declines in prices for energy and used cars and trucks.

The Labor Department said its consumer price index was unchanged in September after inching up by 0.1% in August. Economists had expected another 0.1% uptick.

Another report from the Labor Department showed an unexpected increase in U.S. import prices in the month of September, although the report also showed an unexpected decrease in export prices. Import prices rose by 0.2% in the month, while export prices edged down by 0.2%.

According to preliminary data released by the University of Michigan, consumer sentiment in U.S. improved in the month of October, climbing to 96.0, after rising to 93.2 a month earlier. Economists had expected the index to drop to 92.0.

On the trade front, hopes about a deal, albeit an interim one, between the U.S. and China have risen after U.S. President Donald Trump commented through Twitter that good things were happening at China trade talk meeting and feelings are warmer than in recent past and more like old days.

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October 11, 2019 : GBP/USD Intraday technical analysis and trade recommendations.

Trading 11 oct 2019 Commentaire »


On August 9, the depicted bullish channel has been established.

Since then, the GBP/USD pair has been trending-up except on September 3 when a temporary bearish breakout was demonstrated towards 1.1960.

Around the price level of 1.1960, aggressive signs of bullish recovery (Bullish Engulfing candlesticks) brought the GBPUSD back inside the depicted movement channel.

Moreover, Temporary bullish advancement was demonstrated towards 1.2550 where a short-term reversal channel was demonstrated.

As anticipated, the reversal channel was broken-down on September 23 supported by obvious bearish price action demonstrating a successful bearish closure below 1.2450.

On September 25, the depicted bullish channel was finally terminated with significant full-body bearish candlesticks which managed to achieve bearish closure below 1.2395.

Bearish persistence below 1.2400-1.2440 (Reversal-Pattern Neckline) allowed more bearish decline to occur towards the price levels of 1.2210 where two recent episodes of bullish swings were originated towards 1.2400 on October 2 and October 8.

This week, the price zone of 1.2400-1.2415 (Previous SUPPLY-Zone) was breached to the upside allowing further bullish advancement to occur towards 1.2485, 1.2620 then 1.2680.

Today, bullish breakout above 1.2680 brings further bullish advancement towards 1.2840 (1.61% Fibonacci Expansion).

Otherwise, sideway consolidations may be demonstrated between 1.2680-1.2620 until breakout occurs in either directions.

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ECB's Draghi Says Active Fiscal Policy Can Speed Up Monetary Policy Tightening

Trading 11 oct 2019 Commentaire »

Eurozone governments can support the central bank by actively pursuing fiscal policy reforms and thus, pave the way for raising rates quickly than expected, outgoing European Central Bank President Mario Draghi said Friday.

"We have seen in other regions where fiscal policy has played a greater role since the crisis that the return to price stability has been faster," Draghi said in a speech in Milan, citing the United States as an example. "A more active fiscal policy in the euro area would thus make it possible to adjust our policies more quickly, which we are well aware are having adverse effects on certain sectors of society and certain intermediaries," Draghi said. The former chief of Bank of Italy will step down from his role as the ECB President on October 31. Draghi is set to be succeeded by the former IMF Managing Director Christine Lagarde. Economists said the former French finance minister is set to inherit a fractured policymaking body at the ECB as several hawkish policymakers, especially those from Germany, have voiced opposition to the latest round of stimulus measures announced in September. In the ECB history thus far, Draghi is the only chief who did not raise interest rates during his 8-year long tenure. The Italian economist also raised several eyebrows as he was bold enough to undertake several unconventional measures at the ECB, mainly asset purchases and negative interest rates, which were inconceivable in the euro area years ago. "Central bank independence is not an end in itself," Draghi said. "Its purpose is to ensure that the central bank is credible in its pursuit of price stability, while making sure that monetary policy is never subservient to fiscal policy - what is known as "monetary dominance".

QE opponents, the main being the Bundesbank President Jens Weidmann, fear further asset purchases, especially buying government bonds, would take the ECB too deep into uncertain territory. They are also worried about the urgency and effectiveness of such actions.

And the hawks on the Governing Council have been quite vocal this time. Much worse, the German member on the ECB Executive Board, Sabine Lautenschlager, quit her post late September, apparently due to her opposition to the loose monetary policy.

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Gold rush: investors buy precious metal at a record pace in 11 years

Trading 11 oct 2019 Commentaire »


An example of global central banks that purchased gold in 2018, the record volume of gold over the past 50 years, was contagious.

Following them, exchange-traded funds and large speculators in the gold futures market began a massive buying of the precious metal.

According to the World Gold Council, in the first nine months of this year, the largest ETFs increased gold reserves by 368 tons. As of October 1, their total size amounted to 2.808 thousand tons, exceeding the 2012 historical record.

"The end of September turned into a real gold rush: gold funds recorded an inflow of funds from customers for 17 consecutive days, which has not been observed since the global crisis of 2008," Bloomberg reports.

Along with the US dollar and US government bonds, gold is in demand as a defensive asset.

Trade wars, geopolitical aggravations, a sharp slowdown in the global economy and the stupor of world trade are factors that, according to experts, are pushing investors into safe-haven assets.

"It is already clear that central banks, in an attempt to flood the fire with money, will launch" printing presses ". The ECB was able to hold out without emission for only 9 months and since October began to buy up assets, and the Federal Reserve announced the resumption of the operation to buy back treasury securities. Although Fed Chairman Jerome Powell urged not to call what is happening quantitative easing, it's obvious that this is a new and probably unlimited QE," said Raiffeisenbank analysts.

"Since the beginning of this year, gold has risen by 17%, leaving the corridor ($1100 – 1300), in which quotes have been for the past six years. The nearest target is $1700 per ounce, and next year the precious metal for the first time in history can reach the mark of $2000," Citigroup experts predict.

"In the 1970s, investments in gold hedged about 6% of global equity portfolios, now only 2.7%. This means that by historical standards, there remains a significant space for new money to flow into the market," Bank of America believes.

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U.S. Consumer Sentiment Unexpectedly Shows Continued Rebound In October

Trading 11 oct 2019 Commentaire »

With consumers anticipating larger income gains and lower inflation during the year ahead, the University of Michigan released preliminary data on Friday unexpectedly showing a continued improvement in U.S. consumer sentiment in the month of October.

The report said the consumer sentiment index climbed to 96.0 in October after rising to 93.2 in September. The continued increase surprised economists, who had expected the index to drop to 92.0.

The consumer sentiment index continued to recover after plummeting to a nearly three-year low of 89.8 in August.

Surveys of Consumers chief economist Richard Curtin said the unexpected increase in consumer sentiment came as real income expectations rose to their most favorable level in two decades.

Curtin said "stronger finances and lower interest rates helped to modestly bolster buying plans" but noted "these favorable trends did not change consumers' overall prospects for the national economy."

"A slower pace of overall economic growth is still anticipated, including some modest increases in the national unemployment rate during the year ahead," he added.

The report said the current economic conditions index jumped to 113.4 in October from 108.5 in September, while the index of consumer expectations edged up to 84.8 from 83.4.

On the inflation front, one-year inflation expectations tumbled to 2.5 percent in October from 2.8 percent in September, while five-year inflation expectations dropped to 2.2 percent from 2.4 percent.

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October 11, 2019 : EUR/USD technical outlook indicates further bullish advancement towards 1.1115.

Trading 11 oct 2019 Commentaire »


Recent Descending-Tops were established around the price levels of 1.1060-1.1075 where the backside of a recently-broken trend was retested.

Since then, the EUR/USD has been trending-down within the depicted short-term bearish channel until recent signs of bullish recovery were demonstrated around 1.0880 (Inverted Head & Shoulders Pattern).

Shortly After, a bullish breakout above 1.0960 confirmed the mentioned reversal Pattern which opened the way for further bullish advancement towards (1.1000 -1.1020) where another episode of bearish rejection was expected on October 7.

That's why, initial Intraday bearish pullback was expected towards 1.0940-10915 where another bullish swing was initiated as expected.

The intermediate-term outlook remains bullish as long as the EURUSD pair pursues its current movement above 1.0980 (recent ascending bottom).

Moreover, the current bullish breakout above 1.1030 (0% Fibonacci Expansion) should be maintained. Thus, the short-term projection target remains projected towards 1.1065 and 1.1115.

Bullish persistence above 1.1065 is mandatory to enhance further bullish movement towards 1.1115. Otherwise, sideway consolidations may be demonstrated until bullish breakout is achieved.

Trade recommendations :

Intraday BUY entry was suggested upon the recent bearish pullback towards 1.1000 (Backside of the broken bullish uptrend). It's already running in profits.

Remaining T/P levels to be located at 1.1065 then 1.1115. S/L should be placed below 1.0960.

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Dollar Little Changed Following U.S. Consumer Sentiment Index

Trading 11 oct 2019 Commentaire »

After the release of the University of Michigan's consumer sentiment index for October at 10:00 am ET Friday, the greenback changed little against its major counterparts.

The greenback was trading at 0.9977 against the franc, 108.54 against the yen, 1.1052 against the euro and 1.2686 against the pound around 10:03 am ET.

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