2020-12-07 • Updated
China published the better-than-expected trade balance, signaling the country’s steady recovery. The trade surplus surged to 75.4 billion dollars, while the forecast was 53.8 billion dollars. It was the largest monthly increase in the whole history of China! The strong trade growth can be linked with the severe lockdowns in other parts of the world. These countries need a lot of equipment for medical staff and ordinary people, which is made where? Of course, in China.
However, it isn’t so good as it seems. The widespread vaccinations will rotate the world’s demand for services as social-distancing restrictions will be canceled. As a result, the demand for China’s exports may be reduced. By the way, the Chinese yuan is showing the best performance against the US dollar since 2014. If it continues appreciating, one day China’s goods will be too expensive for overseas buyers. However, all these risks are log-long-term, and they may significantly impact the yuan only in the second half of the next year.
The short-term risk is Sino-American tensions. Donald Trump’s administration is planning to impose sanctions on Chinese officials over the Hong Kong crackdown. According to Steptoe and Johnson, “it’s unlikely the Biden administration will roll back sanctions that are politically popular in Washington. Trump-era sanctions could become sticking points in the US-China relationship for years to come”.
USD/CNH is moving in a downtrend. However, the price is touching the lower trendline and the lower line of Bollinger Bands, we can assume that the pair has the potential to rise to the resistance of 6.5800. The move above this level will drive the price to the high of November 11 at 6.6250. Support levels are 6.5000 and 6.4500.
Brent crude futures is maintaining stability this Friday, with traders awaiting an OPEC+ meeting that might lead to further supply cuts. Brent crude was down 8 cents at $81.34 a barrel, following a 0.7% drop in the previous session.
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
Bitcoin's price remains stagnant despite the Fed's slightly less hawkish tone. In contrast, Bitcoin has outperformed other assets, doubling in price from $16K to nearly $38K this year. Improved fundamentals, including the resolution of Binance concerns...
Hey folks, it’s a wrap to yet another month in the 2023 calendar, and I’m guessing you know what that means - time for another episode in the “What To Trade” series. For December, I will be mapping out trade more cautiously as the market volatility often drops
Gold prices, reaching the highest since May 5, are consolidating as traders await the US PCE Price Index, a key inflation indicator. The upcoming data could impact the Fed's policy, influencing the demand for the US Dollar and providing direction for gold. The Greenback sees some repositioning, recovering modestly ahead of the data risk.
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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