Duncan Donald

Mon, Dec 2

Trade deal optimism keeps markets buoyant in quiet Thanksgiving markets

Markets remain quite buoyant after what was a relatively quiet week with US Thanksgiving holidays. A number of factors have supported global equity markets as we open this Monday. Firstly, there is renewed optimism that a Phase 1 trade deal between the US and China can be reached. Last week high-level negotiators from both sides spoke positively of progress being made and the additional boost came as China seems prepared to address the patent and copyright issue with the setting of new guidelines. Such positivity has held stocks at year highs as we come into December with the markets ever mindful of last years sharp pullback in this month. 


Last week’s Black Friday is showing early signs of success for the retail sector with in-store sales seemingly boosted over online boosting the US Dollar which enjoyed a strong week last week against most currencies. The impeachment trial for US President Trump still hasn’t spilt into the markets with it seemingly buried by positive trade news last week. Donald Trump has until the 6th December to decide whether he will participate actively in the trial. Despite the damaging testimonies the Presidents populism doesn’t yet seem to be slipping.


In the UK last week, we saw some decent appreciation of the Pound after the YouGov poll (the poll that accurately called the last election) showed and majority for the Conservative party, giving them hope of leadership without a coalition. The Conservatives seem to have adopted the approach of stepping away from any potentially dangerous media opportunity, having seen Labours Jeremy Corbyn do himself more harm than good on presenter Andrew Neil’s show, Boris has been evasive in the arrangement of his turn under the Neil spotlight. 


After the terrible terror incident on London Bridge on Friday, sadly the politicians jumped on the circumstances of the event, to try and gain political advantage over each other, the type of campaigning that often does more harm than good from Home Secretary Priti Patel. Weekend polls showed that the Conservative lead perhaps just sits at 8% far narrower than the YouGov poll. The Pound sits right in the middle of the 1.2800- 1.3000 range against the US Dollar where it seems likely to stay until election day on the 12th.


The data calendar does get busier this week with interest rate decisions out of Australia and Canada, who are both expected to leave rates unchanged. Friday brings US employment data with Average earnings, unemployment and Non-farm Payrolls at 1.30 pm on Friday where it is forecast payrolls bounce back to 190k from last month’s 128k, a modest gain from 0.2% to 0.3% in Earnings and unemployment unmoved at 3.6%.



The week ahead: 



  •         PMI data - Italy, Germany, France and Spain
  •         ISM manufacturing data - US



  •         Monetary policy decision - Australia
  •         Construction - UK
  •         PPI - Eurozone



  •         GDP data - Australia
  •         PMI’S - Eurozone Services
  •         ADP Employment Change - US
  •         Interest rate decision - Canada
  •         ISM data - US



  •         Retail Sales data - Eurozone
  •         Employment data - Eurozone
  •         Revised GDP data - Eurozone
  •         Canadian Trade Balance data - US



  •        Industrial Production - Germany
  •        Trade Balance - France
  •        Non-Farm Payrolls Average earnings data - US
  •        Unemployment Rate - US