Cautious optimism emerged as the main underlying theme in Thursday’s early session, despite the conclusion of the historic US-China phase one trade deal.
Markets remained on the edge as several conflicting issues are left unresolved, including the structural economic issues. Also, scepticism now surrounds the phase two deal, especially with the US presidential election scheduled later in November.
As markets re-assessed the trade deal, the US dollar kept its range nearly weekly lows across its main competitors. The USD/JPY pair was trapped in a tight range just below 110.00 despite the gains in the S&P 500 futures and Treasury yields. EUR/USD consolidated close to mid-1.1100, slightly off the weekly highs while GBP/USD tries to keep near the 1.3050 level amid Brexit optimism.
Gold prices ignore the US diplomat’s optimism concerning the latest trade deals with China, Canada and Mexico. The precious metal seems to concentrate more on the US dollar weakness than trade/political headlines that have been positive off-late. Prices have been mildly positive around $1550.
Oil stays mildly bid while taking the rounds to $58.25 during the early Thursday. The black gold recently recovered after the weekly report from the US and the US-China phase-deal signing in ceremony.
Attention now turns towards the macroeconomic releases for near-term trading opportunities. Later in the EU session, the Turkish central bank rate decision and the European Central Bank (ECB) monetary policy meeting’s accounts will grab some attention.
The main event risk, however, remains the US Retail Sales data for December due at 13:30 GMT alongside the weekly Jobless Claims and Canadian ADP Employment Change numbers. Also, of relevance remains the speeches by the Fed official Bowman and ECB President Lagarde, scheduled at 15:00 GMT and 18:00 GMT respectively.