US Delays Tariffs On Chinese Electronic Goods; UK Inflation Numbers In Focus

US Delays Tariffs On Chinese Electronic Goods

The main news that hit the wires yesterday before the European close, was that the US and China trade-talk representatives have agreed on more talks in the near future and that there would be a delay on certain tariffs. The news comes after China’s Liu He discussed over the phone the current trade war situation with his US counterparts, Lighthizer and Mnuchin. It is believed that China has agreed to purchase more agricultural products from the US in exchange to US delaying their tariffs on a few Chinese goods until mid-December. The main Chinese imports into the US that fall under those exclusions are electronic devices. And that is understandable, as companies start to get ready for the Christmas and New Year festive season, where electronic goods are always in high demand.

UK Employment and US Inflation

In other news released yesterday, the UK delivered its employment figures for the month of June. The average earnings including bonus came out as expected, at +3.7%, but the unemployment number went up a tenth of a percent. After the news, GBP pushed a bit higher against most of its major counterparts, putting itself in the positive territory for the day. But once the tariff-news came out, the quickly depreciated against a basket of currencies. The only two currencies, against which the pound managed to stay strong, were the safe-haven yen and Swiss franc. That’s understandable, given the positive news from the trade negotiations.

EUR/GBP — Technical Outlook

After hitting a new high this year, at 0.9325, EUR/GBP retraced slightly lower, where it is currently balancing fractionally above its short-term upside support line taken from the low of August 1 st. But given that the line was violated a few times already, we will not put too much emphasis on it, but instead focus on our key support and resistance levels. For now, we will remain neutral and wait for a clear break through one of our barriers, before examining a further directional move.

USD/CHF — Technical Outlook

Yesterday, we saw the safe-haven currencies falling against all of their major counterparts, after there were a few positive outcomes from the China-US trade negotiations. USD/CHF managed to make its way higher, breaking some key resistance barriers. Given that the risk-on sentiment might stay for a short while in the markets, we believe there could be a chance to slightly higher areas being met. That said, let’s not forget that, still, the pair is within a large downtrend and this move higher might be considered as a correction.

AS FOR THE REST OF TODAY’S EVENTS

US will deliver the crude oil inventories number, which is forecasted to have declined from the previous +2.385M barrels to -2.775M. If so, there is a chance to see a move higher in oil prices. If we get a number, which is higher than expected, the price of oil might fall. This could still be in the scenario, if the real number comes out higher than the forecast, but lower than the previous one. In that case it would mean that, although the amount oil barrels have dropped from the previous reading, still, there is not enough demand for the black liquid as it was expected.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
JFD

JFD

76 Followers

JFD is a leading Group of Companies offering financial and investment services and activities.