This week, markets have been pretty quiet. In the first half of the week, traders were waiting for the economic data to be released from the US. But markets were still left puzzled yesterday after the US GDP and durable goods orders beat expectations. But on the other hand, Chicago PMI missed anticipations and personal income fell flat, against 0.3% expected, while pending home sales posted a big decline. So, mixed economic figures from the US, leaving markets uncertain. Today it’s Thanksgiving Day in the US and US traders have taken off for a long weekend, so I expect uncertainties to continue until next week.

The uncertainty increased further today after US President Donald Trump signed off on the Hong Kong bill on human rights earlier today, prompting Beijing to respond with fighting words and retaliatory threats. China promised that the Hong Kong bill would be met with strong countermeasures and they later they said to be considering to put drafters of HK bill on no-entry list. That shows that China wants Hong Kong badly and want to close walls on it. But, China also promised to give concessions on trade to the US, which shows that that they also want a trade deal badly too. So, the situation remains uncertain now.

The European Session

• German Prelim CPI MoM – Inflation has been weakening in the Eurozone this year and it fell in contraction in Germany during August. In September it fell flat, while in October CPI inflation increased by 0.1%. But, it turned negative again this month, posting a 0.8% decline, against 0.7% expected MoM. But, YoY inflation ticked higher to 1.1% from 1.0% and core CPI YoY moved from 1.4% to 1.6%.
• Swiss Q3 GDP – The Swiss economy contracted in Q3 last year, but it returned back to growth in Q4, expanding by 0.2% in that quarter, by 0.6% in Q1 and by 0.3% in Q2 this year. Economic growth for Q3 was expected to slow down considerably and post a 0.1% expansion for today. But, it beat expectations, expanding by 0.4% instead; so the Swiss economy looks in a decent shape.
• ECB’s Villeroy Points the Finger Elsewhere – ECB governing council member Francois Villeroy de Galhau commented earlier this morning that the Euro area suffered the most from external uncertainty this year. Brexit uncertainty likely to last for at least some quarters in the future. He’s sort of right, since the EU has been sandwiched between the global trade war, Brexit and other geopolitical tensions. But still, they should have seen this coming, that’s what they get paid for.
• Comments Coming From China – China’s foreign ministry commented earlier today that US HK bill is to be met with strong countermeasures. They repeated that US should not implement HK bill, no one should underestimate China’s determination. A tweet by Global Times’ editor-in-chief, Hu Xijin went as follows:
  

  “Based what I know, out of respect for President Trump, the US and its people, China is considering to put the drafters of the Hong Kong Human Rights and Democracy Act on the no-entry list, barring them from entering Chinese mainland, Hong Kong and Macao.”

• Although the Chinese state council said later that they will step up punishment for IP infringement, step up policy support for trade development, lower non-tariff trade barriers and further accelerate efforts to build exports control system to manage trade risks. They will properly resolve trade frictions and further widen market access for foreign capital.

The US Session

• Canadian Q3 Current Account Balance – The Canadian current account, which measures the difference in value between imported and exported goods, services, investment income, and current transfers during the previous quarter, narrowed considerably in Q2, falling to $-6.4 billion, which was revised lower to $-6.7 billion. Today, the deficit was expected to grow again to $-9.5 billion, but it increased further to $-9.9 billion.
• Canadian September Non-Farm Earnings – September non-farm earnings increased by 4.0% YoY, from 2.6% previously.
  • Hours worked up 1.2 hours year-over-year
  • Non-farm payrolls -27.6K
  • Average weekly earnings grew in 9 of the 10 largest industrial sectors
  That’s the largest rise in wages since at least 2014 and this is another reason the Bank of Canada won’t cut.
• US Thanksgiving Bank Holiday – Today is the Thanksgiving Day in the US and banks are obviously closed. Traders have taken off already for a long weekend, so it will likely be very quiet tomorrow as well, particularly in the US session.

Trades in Sight

Bullish WTI Oil

• The trend has been bullish for more than a month
• Buyers remain in control, despite the climb in Crude Oil
• MAs are providing solid support

The 50 and 100 SMAs are doing a great job as support

USD/CAD was pretty bearish during October, following the decline in the USD after manufacturing activity fell deeper in contraction. Risk assets, on the other hand, such as commodity Dollars benefited from the improvement in the sentiment, due to the partial trade deal between US and China. But, the decline stopped above 1.30, which seems to have formed a strong support zone. USD/CAD reversed from there and since then the trend has been bullish for this pair. We saw a surge to the 200 SMA (purple), which provided resistance.

The price retraced down after being rejected by the 200 SMA, but the 50 SMA (yellow) turned into support for this pair. The 50 SMA has been pushing the price higher since then, and whenever it has failed, the 100 SMA (green) has taken its place. Earlier this week, we saw a retrace down to the 100 MA, which held once again, but the price is finding resistance at the 50 SMA now. So, there’s a small battle going on below the 50 SMA now. If it holds, then we might see a pullback to the 100 SMA again; if not, then the bullish momentum will continue and the uptrend might stretch further.

In Conclusion

Markets remain uncertain today, with little incentive to take any sides, after the mixed economic numbers from the US yesterday, as well as due to the US bank holiday. North Korea launched a couple of missiles early today, which have also contributed the keep the risk sentiment muted in financial markets.