The data on US employment released on Friday served as a strong driver not only for the appreciation of the US dollar, but also became a signal to buy risky assets in global markets in general.
According to the data presented, the American economy received 266,000 new jobs in November against the consensus of a forecast of an increase of 186,000. What's more important is that October data was revised up to 156,000. Moreover, the unemployment rate decline to 3.5% again against the expectation of its preservation at around 3.6%.
In addition to these data, the values of consumer expectations and sentiment indices from the University of Michigan turned out to be positive, which rose to 88.9 points and 99.2 points, respectively. Another positive point was the figures indicating an increase in consumer demand - these are the values of the volume of inventories in wholesale warehouses, which added only 0.1% against the forecast of a 0.2% increase.
Of course, the markets could not ignore such news, which caused the steady growth of American and European major stock indexes, which had previously tried to grow on the decline of D. Trump's negative rhetoric regarding China after he said last week that the negotiation process between America and China "going well."
In the wake of general optimism, the American dollar received significant support. The ICE dollar index added sharply from Thursday's close of 97.37 points to Friday's close of 97.66 points. On the other hand, the main euro/dollar currency pair has fallen significantly from the previously reached local maximum of 1.1116, decreasing to 1.1039 at the moment. In turn, protective assets, such as gold, US Treasury bonds, the Japanese yen and the Swiss franc, were also suppressed.
But today, Monday, there is a negative dynamics in the Chinese stock market during the Asian trading session, which tried to grow by winning back Friday's positive in the United States. The reason for the negative is statistics from China, which showed a decline in exports, which, however, was offset by an increase in imports.
Despite the local optimism caused by the US economic statistics, we believe that market tensions will continue, since the topic of US-Chinese trade negotiations remains in the spotlight and will dominate the mood of market participants. As a result, any positive words in this regard by the American president will support a positive mood in the markets and contribute to the appreciation of the dollar. At the same time, negative news will put pressure on him.
In general, we are optimistic about the further development of the situation around trade disputes between Washington and Beijing, although the general tension in the markets will remain until December 15, when the States and China either introduce new trade duties or slow down this process again before the outcome of trade negotiations.
Forecast of the day:
EUR/USD is consolidating above the level of 1.1050. Meanwhile, investors evaluate the prospects for trade negotiations between America and China. Thus, we believe that it may continue to decline to 1.0990 if the pair falls below the level of 1.1050.
Gold is recovering weakly and may rise to 1463.65. We consider it possible to resume sales if the price does not rise above this level with targets at 1452.45 and 1439.00
