12/6. U.S. unemployment falls to 3.5%, wages gain steadily According to the US Department of Labor, US unemployment in November fell to 3.5%, the lowest level since December 1969. October indicator was fixed at 3.6%. The number of jobs in the non-agricultural sector of the United States increased by 266 thousand people, which also became the maximum growth indicator since January of this year. Analysts predicted an increase in jobs by only 180 thousand. It is noteworthy that the previous value of the indicator was revised upward from 128 thousand to 156 thousand. The average hourly wage rate in monthly terms increased by 0.2% (the consensus forecast assumed growth by 0.3%). At an annual rate, the indicator increased by 3.1%. Strong labor market data provided significant support to the US dollar, allowing it to regain positions against many opponents in the Forex market.
10.12. Oil prices are in the red amid worries about a trade war Oil prices continue to decline on Tuesday, as concerns over slowing demand outweighed optimism after reaching an OPEC + agreement to increase production cuts in early 2020. Futures for Brent fell to $63.80 per barrel, and futures for US light oil WTI – to $58.65 per barrel. Experts note that the euphoria over the decline in oil production was short-lived, and an unexpected drop in exports from China underlined the effects of the trade conflict. Exports from China in November fell by 1.1% year on year, while analysts had expected growth by 1%. Moreover, since the start of the OPEC agreement to reduce oil production, the United States has been able to increase production by 4 million barrels per day. Members of the organization understand that the United States can either completely push them out of the market, or OPEC countries will have to increase production, which will immediately bring down the oil market.
11.12. US inflation firms in November According to the Labor Department, U.S. consumer prices increased solidly in November by 2.1% compared with the same month the previous year. Thus, inflation accelerated compared with 1.8% in October and reached its maximum rate over the past year. Consumer prices rose 0.3% from the previous month after rising 0.4% in October. Analysts predicted an increase of 2% in annual terms and 0.2% monthly. Prices excluding the cost of food and energy (Core CPI) in November rose by 0.2% compared to the previous month and by 2.3% compared with the same month last year. Both indicators coincided with the average expectations of analysts, as well as with the October changes. The growth rate of food prices in the USA in November slowed down to 1.9% in annual terms from 2.1% a month earlier, medical care – to 4.2% from 5.1%. The average hourly wage of Americans adjusted for inflation last month increased by 1.1% year on year compared with the revised 1.4% in October. Energy prices jumped 0.8% in November from the previous month. Such data could support the Federal Reserve’s intention not to cut interest rates again in the near term after reducing borrowing costs three times this year.
12.12. China and US negotiate ahead of new round of tariffs The Chinese Ministry of Commerce said today that Beijing and Washington are in close contact on a further trade agreement. At the same time, the Ministry declined to comment on possible retaliatory steps if the United States imposes additional tariffs on imports from China this week. On Sunday, December 15, the US is due to introduce new fees for almost $160 billion of Chinese imports, including video game consoles, computer monitors and toys. Today US President D. Trump intends to meet with top trade advisers to discuss this step. If a decision to impose tariffs is nevertheless made, it could disrupt US-China talks to end the 17-month-long trade war between the world's two largest economies. The future of today’s discussions is not yet known, however, in the case of the introduction of American tariffs, China intends to apply a tough response: restoring of 25% tariff on US-made vehicles and 5% tariff on auto parts. Fees for many goods will also be involved, ranging from corn and wheat to small aircraft and rare-earth magnets.
16.12. Trump may become the third US president impeached This week U.S. President Republican Donald Trump is likely to become the third U.S. president faced with the impeachment. Previously, Andrew Johnson and Bill Clinton had already undergone a similar procedure, in 1868 and 1998 respectively, but they were not convicted by the Senate. Richard Nixon voluntarily resigned in 1974 as soon as his impeachment process had began. D. Trump is accused simultaneously on several points: of abuse his power during the Ukrainian scandal and of obstructing Congress' investigation into the matter. As stated earlier, the American president was trying to force Ukraine to investigate his political opponent Joe Biden. However, the head of the White House denies all the blame, saying that «there was nothing done wrong». Voting in the House of Representatives will take place this week, and the Democrats are expected to win, as the decision to impeach requires a simple majority. As you know, the advantage of the Democratic Party over the Republicans is 36 seats. However, for the final removal of the president, this decision must be supported by two-thirds of the Senate members, where Republicans have 53 out of 100 votes.
17.12. The price of palladium topped $2 thousand per ounce The cost of palladium today set a new historical record, exceeding $2 thousand per troy ounce.The price of the metall in the morning hours reached $2000.5, subsequently rolling back to $1945.45. Experts attribute the rising cost of palladium to concerns about metal supplies. Also, the rise may be due to a sharp increase in demand in the automotive industry in Europe and China. Palladium is used in the manufacture of exhaust catalysts for gasoline engines, and since the largest countries are tightening environmental requirements for vehicles, demand for metal will continue to grow. Last week the price of palladium once updated its historic high at $1914, for the first time overtaking the price of gold.
18.12. Kazimir: Weak eurozone growth could last for years European Central Bank Governing Council member Peter Kazimir said, that the eurozone economy may remain weak until the block solves a number of structural problems. Kazimir, who is also the head of the Central Bank of Slovakia, also noted, that the EU is lagging behind in technology, that prevents the bloc from achieving significant economic growth. Moreover, in order for the European economy to show signs of strengthening, it is necessary to complete the European Monetary Union. Another Governing Council member Madis Müller said, that the regulator should consider reducing inflation control. «We could be more flexible and not chase that goal (inflation just below 2%) at any price», – he said. Recall that last week the ECB released a forecast for the eurozone economy, which lags behind potential, and noted, that the pace could slow down even more by 2022.
19.12. China exempts a number of American goods from duties After the United States and China announced the conclusion of the first phase of trade deal, Beijing unveiled a new list of exempted from duties goods from the United States. The exemption from tariffs will enter into force on December 26 and will last a year, until December 26, 2020. Tariffs will be canceled for six categories of products, including white oil, high density polyethylene and linear low density polyethylene. The total value of imported goods is not specified. Last Friday, Washington and Beijing announced the approval of the text of the first part of the trade agreement, under which the parties agreed not to introduce new duties on each other. On Sunday, U.S. trade representative Robert Lighthizer said that the signing of the first phase of the transaction will take place in early January 2020. He also noted that this agreement will lead to an almost twofold increase in US exports to China in the next two years, since it implies an increase in China's purchases of US agricultural, industrial and energy products.
20.12. US Commerce Department maintains estimate of country's GDP growth in Q3 at 2.1% According to the third and final estimate of the US Commerce Department, real gross domestic product (GDP) increased at a 2.1% rate. The indicator coincided with the forecasts of analysts and the second estimate. According to the first estimate, the growth of the US economy in the reporting period amounted to 1.9%. In the first quarter of this year, the country's GDP growth in annual terms amounted to 3.1%, in the second – 2%. The indicators for 2018 were as follows: 2.5% growth in the first quarter, in the second – 3.5%, in the third – 2.9%, and in the fourth – 1.1%.
23.12. Gold rises weakly in anticipation of details of the trade agreement The price of gold is growing slightly on Monday, market participants are waiting for further news from the front of the trade war. The cost of the February gold futures on Comex New York Stock Exchange reached $1.488.95. On Saturday, US President D. Trump confirmed that a trade agreement with China, which the parties have been negotiating for more than a year, will be signed soon. However, the details of the deal are not specified. Market participants are concerned about the lack of additional information, as well as the fact that China has protested to the United States regarding the inclusion of items on supporting protesters in Hong Kong in the draft defense budget for 2020.
