The most awaited news of the week was scheduled at the end of it but before there were a series of market mover and very interesting preliminary data.
We are going backwards starting from the important news, that is the decision of OPEC to extend the cuts throughout 2018.
The producing countries (internal and external to the organization) have chosen to extend the cuts throughout the course of 2018. The historic OPEC agreement of 30 November 2016 was again extended but leaving open the possibility of modifying what was agreed.
The novelty concerns the inclusion in the agreement of Libya and Nigeria that were exempt until now for economic and humanitarian reasons.
What has not been a novelty, however, is how Russia’s position has predominated over everyone: not agreeing on what was decided, he made sure to add the clause of the possible escape during 2018.
The price of oil reacted by pushing up, reaching the maximum level of $64. It is from the level of the price reached by the oil that it will be decided whether to block the cuts or to continue.
Speaking of the United States, the important data were two: the manufacturing SMEs and the unemployment benefits request. The first disappointed market expectations in November, passing from 58,7 in June to 58,2.
The initial requests for unemployment benefits, on the other hand, amounted to 238 thousand, which moved away from the consensus and from the previous figure both of 240 thousand.
These data, in addition to rumors about the new US tax reform promoted by the President Donald Trump, are affecting the dollar and especially the USD / JPY that continues to grow and fluctuate around 112,50. The yen seems to have lost its role as a safe haven currency and in carry trade, to the benefit of a well-defined currency: the euro.
European currency has a low interest rate (equal to 0%) and currently the Eurozone is experiencing a period of good economic growth, which leads investors to practice carry trades on the euro rather than on the yen.
The US dollar, on the other hand, achieved very low performances throughout 2017, as well as the US shareholding on Wall Street, but it remains difficult to think that this condition could last over time.
After the latest North Korean missile crises, the yen did not suffer the expected hike and the USD / JPY cross did not suffer major consequences.
The week from the 4th to the 8th of December will be full of ideas on which traders can concentrate and operate. There are many events that will run after the Economic Calendar, starting from the PMI indexes of the entire Eurozone.
Among the most important market mover of the week it is certainly worth those related to the US labor market: Non Farm Payrolls and unemployment rate will steal the macroeconomic stage and will surely influence the euro dollar exchange rate.
Under the attention of investors there will be also the Eurozone GDP, as well as data on the trust of investors and consumers. Attention also on the data on oil after what happened during the week.
DOVISH DRAGHI CANNOT GET THE EURO OFF FROM THE PODIUM