Urban studies: Doing research when every city is different 
Wall Street Analysts Weigh in on Latest NFP Data 
Fed May Resume Rate Hikes: BofA Analysts Outline Key Scenarios 
Gold Prices Slide as Rate Cut Prospects Diminish; Copper Gains on China Stimulus Hopes 
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
2025 Market Outlook: Key January Events to Watch 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
Oil Prices Dip Slightly Amid Focus on Russian Sanctions and U.S. Inflation Data 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
Lithium Market Poised for Recovery Amid Supply Cuts and Rising Demand 
Global Markets React to Strong U.S. Jobs Data and Rising Yields 
Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
UBS Projects Mixed Market Outlook for 2025 Amid Trump Policy Uncertainty 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
Geopolitical Shocks That Could Reshape Financial Markets in 2025 
A momentary ceasefire of the trade war after China and the US reached a trade deal over the weekend. The deal means both sides will not impose any new tariff for the time being. Additionally, Washington has agreed not to raise tariffs on US$200 billions of Chinese goods as it had planned to do on January 1 2019. However, the existing 10% tariff rate will remain in force.
Meanwhile, a negotiation will start immediately on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. Both parties agree that they will endeavor to have this transaction completed within the next 90 days.
According to the White House, if at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%. This deal is largely in line with our expectations that it is most likely that China will make enough vague concessions to achieve a ceasefire that paves the way for further negotiations. Certainly, the negotiation will be difficult and protracted, implying that the road ahead is still bumpy.
However, a trade deal will give China a short breather, allowing the Chinese authorities to put more efforts on boosting the domestic demand.
On the FX market, the PBoC fixed the USD-CNY at 6.9431 this morning, largely in line with market expectations, showing little bias in the CNY exchange rates after the Trump-Xi meeting. CNY received a short boost in early Asian trading session, with USDCNY trading at around 6.93, the lower band of the current trading range of around 6.92-6.97.
On a separate note, China’s Caixin manufacturing PMI, a gauge of the performance of private companies, came in at 50.2 for November. While this reading was slightly better than expected, the overall dynamics of the Caixin PMI remains on a soft footing, suggesting that the private companies are still struggling.
OTC updates:The implied volatility of USDCNY options has been on the rise since October, indicating that the market remains vigilant for the time being.
Unfortunately, there are a lot of risks that can’t be fully hedged by the FX derivative market. Look at what happened in GBP in recent weeks, and you will understand my point.
Trade tips: Buy 9M 40D (7.12 strike) USD calls/CNH puts vs. sell 9M 4.60-5.20 AUDCNH Strangle. Courtesy: commerbank
Currency Strength Index:FxWirePro's hourly CNY spot index is flashing at -110 levels (which is bearish), hourly USD spot index was at -10 (neutral) while articulating at (13:10 GMT). For more details on the index, please refer below weblink:
