David Morrison  |  26/11/2018 08:40
Disagreements between the US and China were evident at the Asia-Pacific Economic Cooperation summit over the weekend. This ended with the group unable to produce a joint communique for the first time in its history. Investors are now focusing on the expected meeting between President Donald Trump and Chinese President Xi Jinping at the G20 in Argentina at the end of this month.
 
Last Monday the EURUSD was trading just above 1.1200, close to an 18-month low. But one week on it’s back above 1.1400 and retesting resistance.
Worries over Italy’s proposed budget and the UK’s withdrawal process from the European Union have been eclipsed by a bout of short-side profit-taking and comments from members of the US Federal Reserve. On Friday Fed vice chair Richard Clarida and Dallas Federal Reserve President Robert Kaplan both expressed caution over the global growth outlook. This led traders to reassess the pace of future rate hikes from the US central bank. According to the fed funds futures market the probability of the FOMC hiking rates next month has dropped below 70% from over 75%  a week ago.
 
Last week gold bounced off support around 1196 to hit 1225 on Friday. Meanwhile sterling had a volatile week. While it was a touch firmer against both the dollar and euro first thing Monday morning, it remains vulnerable to further selling as UK PM Theresa May struggles to sell her Brexit deal.
 
We’re going into a holiday-shortened week with US markets closed on Thursday for Thanksgiving. This means that trading volumes will be lighter than usual, but that can often lead to a pick-up in volatility. Tuesday sees the release of minutes from the Reserve Bank of Australia’s last monetary policy meeting, the Bank of England’s Inflation Report Hearings and another OPEC-JMMC meeting, which is bound to affect the oil price. Later in the day we have US Building Permits and Housing Starts. On Wednesday we have US Durable Goods, Consumer Sentiment, Inflation Expectations and Crude Oil Inventories. Thursday brings the release of the ECB Monetary Policy Meeting accounts and it’s US Thanksgiving. Japanese markets are closed on Friday. Later that day we have Flash Manufacturing and Services PMIs from across the Euro zone together with Canadian CPI and Retail Sales.

Have a great week!

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