22.11. European markets lost growth after weak PMI

On Friday, European stock markets slowed earlier growth. It was caused by the publication of the weak preliminary business activity index (PMI) in the Eurozone, which didn’t show the visible improvement in the economy of the region, still weighed down by the trade conflict between the US and China.

According to IHS Markit, in October, the composite business activity index in the European Union fell from 50.6 to 50.3, fell short of the expectations for an improvement to 50.9. Data from France and Germany showed that manufacturing PMIs were stronger than expected, but service sector activity slowed sharply.

Christina Lagarde, the new president of the European Central Bank noted, that she was not intended to sharply change the monetary policies of her predecessor, Mario Draghi. And judging by the shares, banks are confident that in the near future easing of monetary policy will not happen. 

25.11. Former New York City Mayor Mike Bloomberg officially announces he's running for president

The billionaire former mayor of New York City Michael Bloomberg officially announced on Sunday that he was running for president in 2020 as a Democrat.

Earlier Michael Bloomberg, whose fortune is estimated at $45 billion, abandoned the idea of ​​running in the presidential race after former US Vice President Joe Biden (who was seen by everyone as an unconditional leader) went to the polls. But in the last two months, Biden’s position has been shaken and Senator Elizabeth Warren, of extremely left-wing views, began to take the lead. 

But this was not long and soon Warren began to lose to the incumbent US president. This fact made Democrat-centrist Michael Bloomberg take the decision to return to the presidential race. 

The billionaire said: «The US cannot afford four more years of President Trump's reckless and unethical actions. He represents an existential threat to our country and our values. If he wins another term in office, we may never recover from the damage». 

So, on Sunday there appeared the first pre-election video of Michael Bloomberg started on television – he spent $34 million on this advertisement, which will be broadcast on the air for another week. It is noted, that Bloomberg is going to finance the campaign completely from his own funds and not accept donations. 

26.11. Oil gains on optimism in US-China trade talks

According to trading data, world oil prices began to rise today amid optimism around the prospects for trade relations between the US and China. Additional support for oil quotes is provided by expectations of the OPEC+ meeting in early December. The current Brent oil price is $63.18 per barrel. 

Washington-Beijing trade relations continue to affect the oil market. Top US and Chinese trade negotiators held a phone call on Tuesday: Deputy Prime Minister He, the US Minister of Finance S. Mnuchin and the sales representative R. Lighthizer reached an agreement on many issues, including the cancellation of part of the tariffs. The optimism that the trade conflict will at least ease somewhat is currently preventing prices from falling.

Traders are also waiting for news on the prospects of the OPEC+ deal. The OPEC and OPEC+ meetings will be held December 5-6 in Vienna. Last week, Russian Energy Minister A. Novak said it was too early to talk about extending the OPEC+ deal. At the same time, Reuters reported, citing sources, that OPEC+ could extend an agreement to reduce oil production immediately until June at a meeting in December.

27.11. US GDP growth revised up to 2.1%

According to the press release from the US Department of Commerce, the US economy grew at a 2.1% annual pace in the III quarter, which exceeded forecasts. Analysts expected to maintain the indicator at the level of the first estimate of 1.9%.

In the first quarter of 2019, the American GDP growth in annual terms amounted to 3.1%, in the second – 2%. In the 2018 the figures were the following: in the first quarter the growth was 2.5%, in the second quarter – 3.5%, in the third – 2.9%, in the fourth – 1.1%.

Economists believe that economic growth was caused by a stronger pace of inventory accumulation and a less steep decline in business investment.

28.11. Bitcoin grows after drawdown the previous days

After a drawdown amid the news about the hacking of the Upbit exchange, the price of bitcoin showed a sharp increase. The current cryptocurrency quote is $7,622. The total market capitalization surpassed the $200 billion mark, the dominance index rose to 66.6%.

Earlier, the Bitcoin exchange rate crashed to the level of $6,553 after the South Korean cryptocurrency exchange Upbit confirmed the fact of hacking. Hackers stole 342 thousand ETH ($48.2 million) from a hot wallet. All assets, were transferred to cold wallets. The exchange intends to indemnify in full.

Some observers are sure that an insider worked among the exchange’s employees, since the attack was carried out at the time the exchange moved funds.

29.11. Eurozone inflation rises quicker than expected in November

According to preliminary estimates of European statistical agency Eurostat, annual inflation in 19 countries of the Eurozone in November jumped to 1% from 0.7% in October. Analysts predicted acceleration of inflation to 0.9%.

A year earlier, in November 2018, annual inflation in the eurozone was 1.9%. According to preliminary estimates, core inflation in November amounted to 1.3% against the level of October at 1.1%.

The acceleration of inflation in the region was caused by a rise in food and services prices. Core inflation excluding food and energy prices picked up to 1.5% from 1.2% a month earlier, beating expectations for 1.3%. The inflation excluding alcohol and tobacco prices, accelerated to 1.3% from 1.1%, ahead of forecasts for 1.2%.

02.02. China imposed sanctions against a number of US organizations

According to a statement by representatives of the Ministry of Foreign Affairs of the People's Republic of China, the Chinese authorities imposed sanctions on US non-governmental organizations for «supporting extremist activities» in Hong Kong.

The sanctions affected Human Rights Watch (HRW), the National Democratic Institute for International Affairs, and Freedom House. The Chinese authorities also decided to suspend the review of requests by US military ships and aircraft to visit Hong Kong.

The MFA explained that the reason for the sanctions was the US-approved law on the protection of human rights and democracy in Hong Kong. China took this as a serious violation of international law and interference in the internal affairs of China.

Recall that the protests in Hong Kong began in late March due to dissatisfaction of residents with the draft law on extradition to China. After the revocation of the bill the demonstrations did not stop. US President Donald Trump signed two bills in support of protesters in Hong Kong on November 27, despite Beijing’s repeated objections.

03.12. Trump: The deal with China will have to wait until the 2020 elections

U.S. President Donald Trump noted that he could postpone the signing of a trade agreement with China for an indefinite period, until the US presidential election in November 2020. Such news alarmed the markets, depriving hopes for a quick resolution of a trade dispute, that slows down the global economy.

At a meeting with reporters, Trump said that he was ready to wait until the election. At the same time, the American president continues to insist that the deal should fully comply with the interests of the United States, otherwise it simply may not take place.

Following Trump's comments, stock prices in Europe and the Chinese yuan fell to local lows.

04.12. U.S. private sector job growth slows down sharply in November

According to the press release from the analytical company Automatic Data Processing (ADP), U.S. private-sector employment increased only 67,000 in November.

The gain was well below forecasts from economists who expected a gain of 156,000. It turned out to be the smallest gain since May. Prior to the ADP data, analysts expected Friday’s government report will show 189,000 jobs created in November up from 128,000 in the prior month.

In the small business sector the number of jobs increased by 11 thousand, medium-sized companies with 50-499 employees increased their staff by 29 thousand, and large companies created 27 thousand new jobs. 

05.12. The number of filing applications for unemployment benefits in the US fell by 10 thousand

According to the report of the US Department of Labor, the number of Americans filing applications for unemployment benefits unexpectedly fell last week ending November 30, hitting their lowest level in seven months. The indicator decreased by 10 thousand compared to the previous week and amounted to 203 thousand.

The indicator of the previous week amounted to 213 thousand.

Analysts had expected the number of initial applications to grow by 2 thousand compared to the previous week and will amount to 215 thousand. 

12/6. U.S. unemployment falls to 3.5%, wages gain steadily

According to the US Department of Labor, US unemployment in November fell to 3.5%, the lowest level since December 1969. October indicator was fixed at 3.6%.

The number of jobs in the non-agricultural sector of the United States increased by 266 thousand people, which also became the maximum growth indicator since January of this year. Analysts predicted an increase in jobs by only 180 thousand. It is noteworthy that the previous value of the indicator was revised upward from 128 thousand to 156 thousand.

The average hourly wage rate in monthly terms increased by 0.2% (the consensus forecast assumed growth by 0.3%). At an annual rate, the indicator increased by 3.1%.

Strong labor market data provided significant support to the US dollar, allowing it to regain positions against many opponents in the Forex market.

10.12. Oil prices are in the red amid worries about a trade war

Oil prices continue to decline on Tuesday, as concerns over slowing demand outweighed optimism after reaching an OPEC + agreement to increase production cuts in early 2020.

Futures for Brent fell to $63.80 per barrel, and futures for US light oil WTI – to $58.65 per barrel. Experts note that the euphoria over the decline in oil production was short-lived, and an unexpected drop in exports from China underlined the effects of the trade conflict. Exports from China in November fell by 1.1% year on year, while analysts had expected growth by 1%.

Moreover, since the start of the OPEC agreement to reduce oil production, the United States has been able to increase production by 4 million barrels per day. Members of the organization understand that the United States can either completely push them out of the market, or OPEC countries will have to increase production, which will immediately bring down the oil market.

11.12. US inflation firms in November

According to the Labor Department, U.S. consumer prices increased solidly in November by 2.1% compared with the same month the previous year. Thus, inflation accelerated compared with 1.8% in October and reached its maximum rate over the past year. 

Consumer prices rose 0.3% from the previous month after rising 0.4% in October. Analysts predicted an increase of 2% in annual terms and 0.2% monthly. 

Prices excluding the cost of food and energy (Core CPI) in November rose by 0.2% compared to the previous month and by 2.3% compared with the same month last year. Both indicators coincided with the average expectations of analysts, as well as with the October changes.

The growth rate of food prices in the USA in November slowed down to 1.9% in annual terms from 2.1% a month earlier, medical care – to 4.2% from 5.1%.

The average hourly wage of Americans adjusted for inflation last month increased by 1.1% year on year compared with the revised 1.4% in October.

Energy prices jumped 0.8% in November from the previous month.

Such data could support the Federal Reserve’s intention not to cut interest rates again in the near term after reducing borrowing costs three times this year.

12.12. China and US negotiate ahead of new round of tariffs

The Chinese Ministry of Commerce said today that Beijing and Washington are in close contact on a further trade agreement. At the same time, the Ministry declined to comment on possible retaliatory steps if the United States imposes additional tariffs on imports from China this week.

On Sunday, December 15, the US is due to introduce new fees for almost $160 billion of Chinese imports, including video game consoles, computer monitors and toys. Today US President D. Trump intends to meet with top trade advisers to discuss this step. If a decision to impose tariffs is nevertheless made, it could disrupt US-China talks to end the 17-month-long trade war between the world's two largest economies.

The future of today’s discussions is not yet known, however, in the case of the introduction of American tariffs, China intends to apply a tough response: restoring of 25% tariff on US-made vehicles and 5% tariff on auto parts. Fees for many goods will also be involved,  ranging from corn and wheat to small aircraft and rare-earth magnets.

16.12. Trump may become the third US president impeached

This week U.S. President Republican Donald Trump is likely to become the third U.S. president faced with the impeachment. Previously, Andrew Johnson and Bill Clinton had already undergone a similar procedure, in 1868 and 1998 respectively, but they were not convicted by the Senate. Richard Nixon voluntarily resigned in 1974 as soon as his impeachment process had began.

D. Trump is accused simultaneously on several points: of abuse his power during the Ukrainian scandal and of obstructing Congress' investigation into the matter. As stated earlier, the American president was trying to force Ukraine to investigate his political opponent Joe Biden. However, the head of the White House denies all the blame, saying that «there was nothing done wrong».

Voting in the House of Representatives will take place this week, and the Democrats are expected to win, as the decision to impeach requires a simple majority. As you know, the advantage of the Democratic Party over the Republicans is 36 seats. However, for the final removal of the president, this decision must be supported by two-thirds of the Senate members, where Republicans have 53 out of 100 votes.

17.12. The price of palladium topped $2 thousand per ounce 

The cost of palladium today set a new historical record, exceeding $2 thousand per troy ounce.The price of the metall in the morning hours reached $2000.5, subsequently rolling back to $1945.45.

Experts attribute the rising cost of palladium to concerns about metal supplies. Also, the rise may be due to a sharp increase in demand in the automotive industry in Europe and China. Palladium is used in the manufacture of exhaust catalysts for gasoline engines, and since the largest countries are tightening environmental requirements for vehicles, demand for metal will continue to grow.

Last week the price of palladium once updated its historic high at $1914, for the first time overtaking the price of gold.

18.12. Kazimir: Weak eurozone growth could last for years

European Central Bank Governing Council member Peter Kazimir said, that the eurozone economy may remain weak until the block solves a number of structural problems. 

Kazimir, who is also the head of the Central Bank of Slovakia, also noted, that the EU is lagging behind in technology, that prevents the bloc from achieving significant economic growth. Moreover, in order for the European economy to show signs of strengthening, it is necessary to complete the European Monetary Union.

Another Governing Council member Madis Müller said, that the regulator should consider reducing inflation control. «We could be more flexible and not chase that goal (inflation just below 2%) at any price», – he said.

Recall that last week the ECB released a forecast for the eurozone economy, which lags behind potential, and noted, that the pace could slow down even more by 2022.

19.12. China exempts a number of American goods from duties

After the United States and China announced the conclusion of the first phase of trade deal, Beijing unveiled a new list of exempted from duties goods from the United States. The exemption from tariffs will enter into force on December 26 and will last a year, until December 26, 2020.

Tariffs will be canceled for six categories of products, including white oil, high density polyethylene and linear low density polyethylene. The total value of imported goods is not specified.

Last Friday, Washington and Beijing announced the approval of the text of the first part of the trade agreement, under which the parties agreed not to introduce new duties on each other. On Sunday, U.S. trade representative Robert Lighthizer said that the signing of the first phase of the transaction will take place in early January 2020.

He also noted that this agreement will lead to an almost twofold increase in US exports to China in the next two years, since it implies an increase in China's purchases of US agricultural, industrial and energy products.

20.12. US Commerce Department  maintains estimate of country's GDP growth in Q3 at 2.1%

According to the third and final estimate of the US Commerce Department, real gross domestic product (GDP) increased at a 2.1% rate. The indicator coincided with the forecasts of analysts and the second estimate. According to the first estimate, the growth of the US economy in the reporting period amounted to 1.9%.

In the first quarter of this year, the country's GDP growth in annual terms amounted to 3.1%, in the second – 2%. The indicators for 2018 were as follows: 2.5% growth in the first quarter, in the second – 3.5%, in the third – 2.9%, and in the fourth – 1.1%.

23.12. Gold rises weakly in anticipation of details of the trade agreement

The price of gold is growing slightly on Monday, market participants are waiting for further news from the front of the trade war. The cost of the February gold futures on Comex New York Stock Exchange reached $1.488.95. 

On Saturday, US President D. Trump confirmed that a trade agreement with China, which the parties have been negotiating for more than a year, will be signed soon. However, the details of the deal are not specified.

Market participants are concerned about the lack of additional information, as well as the fact that China has protested to the United States regarding the inclusion of items on supporting protesters in Hong Kong in the draft defense budget for 2020.

24.12. Canadian economy shows easing for the first time in 8 months

Canada's economic indicators unexpectedly fell in October amid a sharp decline in manufacturing and retail sales.

According to Statistics Canada data, GDP in October fell by 0.1% compared with the previous month – to 1.975 trillion Canadian dollars ($ 1.5 trillion). This decline became the first in eight months. Analysts had forecast growth of 0.1% after rising 0.1% in September. In annual terms, the Canadian economy grew by 1.2%.

The most negative impact on the country's economy had a decline in manufacturing (by 1.4%) and in retail trade (by 1.1%).

25.12. China says it is in close touch with U.S. on trade deal

US President Donald Trump and President Xi Jinping of China announced that the first phase of a comprehensive trade agreement has already been concluded, and now the necessary documentation is being finalized and translated. Moreover, the heads of two countries plan to hold a ceremony of signing the first stage trade agreement.

Foreign Ministry Spokesperson Geng Shuang also confirmed that the parties are in close contact and they effectively interact in resolving and discussing various issues.

The signing ceremony will take place in early 2020. The representative of the Commerce Ministry of China said that details of the terms of the deal will be made public only after the formal signing of the agreement.

26.12. Oil is on the way to new highs

Oil prices continue their upward movement. Growth is supported by expectations of a Washington and Beijing trade deal, as well as data on a decrease in US inventories.

Futures for Brent crude this morning are trading at $67.40 per barrel. February quotes for WTI crude oil are $61.35 per barrel.

According to the American Petroleum Institute data (API), US commercial oil inventories fell 7.9 million barrels last week. API is a private company that receives information from refinery operators, oil storage facilities and pipelines on a voluntary basis. However, these statistics do not always coincide with official data from the US Department of Energy. This data will be released this week on Friday.

We also note that on Wednesday the market was closed in connection with the celebration of Catholic Christmas. The oil market continues to get support from the optimism about the trade agreement between the US and China. US Treasury Secretary Steven Mnuchin confirmed that an agreement with China will be signed soon.

Analysts note that oil prices are likely to change little over the next year, as OPEC+ actions to reduce production will be balanced by production growth in other countries, and the prospects for demand are still unclear. Experts predict a rise in oil prices in the middle of the year amid rising demand from developing countries and OPEC+ measures.

27.12. Russian authorities are considering the possibility of exit from the OPEC +

The head of the Ministry of Energy of the Russian Federation, Alexander Novak, said that the Russian authorities will soon consider the issue of a possible withdrawal from the OPEC+ agreement.

Despite the effectiveness of the deal to reduce global oil production, A. Novak believes that Russia will need to gradually make a decision to exit in order to maintain market share and enable Russian companies to implement their promising projects.

The minister also noted that the market responds very well to such agreements to reduce production: volatility has decreased, investment in the industry has returned, and current oil prices satisfy both producers and consumers.

At the moment, the agreement provides for a reduction in production by 1.2 million barrels per day from the level of October 2018 until the end of 2019 and by 1.7 million barrels – in the first quarter of 2020.

30.12. Beijing authorities urged to abandon cryptocurrency trading

Several municipalities in Beijing, including the Financial Supervision and Administration Service, the People’s Bank of China Business Administration Division, the Banking and Insurance Regulatory Service, and the Securities Market Regulatory Service, have called on businesses to abandon cryptocurrency trading activities.

The regulatory authorities noted that some cryptocurrency platforms have already seriously violated the rules prohibiting ICOs issued in 2017. Moreover, the institutions called on Chinese companies to impede the promotion of cryptocurrency projects and platforms, as well as to report on all violations of the relevant rules.

It is worth noting that such policy of the Chinese authorities is conducted in parallel with the development of a national cryptocurrency. As you know, the People's Bank of China is preparing to test the electronic payment system in digital currency (DC / EP) in the cities of Shenzhen and Suzhou.

Seven state enterprises were selected as a platform for testing the digital renminbi: four commercial banks and three telecommunications giants (China Mobile, China Telecom and China Unicom). The pilot program will affect the field of transport, education, trade and medical services.