Major US stock indices fell slightly due to uncertainty regarding the high-level meeting between the US and China at the G20 summit.

The focus was also on the minutes of the Fed meeting. The document said that almost all participants in the November Fed meeting said that another rate increase "may be appropriate in the near future if the incoming information about the labor market and inflation will meet current expectations." “Many participants in the meeting made it clear that in future meetings, it is likely that greater emphasis should be placed on data when assessing the economic situation and monetary policy prospects. Such changes will demonstrate the FOMC’s flexible approach to a changing economic environment,” the protocol indicated.

In addition, market participants played a block of data on the United States. The Ministry of Labor reported that initial claims for unemployment benefits rose last week by 10,000 to 234,000, taking into account seasonal fluctuations, the highest level since mid-May. Primary circulation grows for three weeks in a row. Economists had forecast a decline to 220,000.

In addition, the Commerce Department said that consumer spending in the United States increased the most in seven months in October, but basic price pressure slowed down, showing the smallest annual increase since February. Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.6%. The data for September were revised downwards from 0.4% to 0.2%. Economists had forecast growth in spending by 0.4% in October. When adjusted for inflation, consumer spending rose by 0.4%, which is also the largest increase in seven months.

In addition, the National Association of Realtors (NAR) reported that the expected sales of housing in the US unexpectedly showed a significant decline in the month of October. NAR said that the index of pending home sales fell by 2.6% in October to 102.1 points, after rising by 0.7% in September (revised from + 0.5%). As a result, the index reached its lowest level since mid-2014. The sharp decline surprised economists, who expected the index to increase by 0.5%. In annual terms, expected sales decreased by 6.7%, registering the 10th consecutive drop.

Most of the DOW components showed a decrease (18 out of 30). Intel Corporation (INTC, -2.16%) was an outsider. The growth leader was the shares of The Boeing Company (BA, + 2.76%).

Most sectors of the S & P finished trading in the red. The most conglomerate sector fell (-0.5%). The growth leader was the base materials sector (+ 0.5%).

The Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 2.6 percent to 102.1 in October, down from 104.8 in September. However, year-over-year contract signings dropped 6.7 percent, making this the tenth straight month of annual decreases.

Lawrence Yun, NAR chief economist, said that ten straight months of decline certainly isn’t favorable news for the housing sector. “The recent rise in mortgage rates have reduced the pool of eligible homebuyers,” he said.

Yun notes that a similar period of decline occurred during the 2013 Taper Tantrum when interest rates jumped from 3.5 percent to 4.5 percent. After 11 months – November 2013 to September 2014 – sales finally rebounded when rates decreased. “But this time, interests rates are not going down, in fact, they are probably going to increase even further,” Yun noted.

U.S. stock-index futures fell moderately on Thursday, as investors took a breather following a rally in the previous session, which was triggered by dovish statements of the  Fed Chairman Jerome Powell.

Global Stocks:

(company / ticker / price / change ($/%) / volume)

McDonald's (MCD) upgraded to Overweight from Equal-Weight at Morgan Stanley

Intel (INTC) downgraded to Hold from Buy at DZ Bank

American Express (AXP) downgraded to Neutral from Buy at Buckingham Research

Canada's current account deficit (on a seasonally adjusted basis) narrowed by $6.3 billion in the third quarter to $10.3 billion, the lowest level since the end of 2016. This reduction reflected lower deficits on goods, services and investment income.

In the financial account (unadjusted for seasonal variation), higher deposits held by non-resident investors in Canada led the inflow of funds in the economy. Sizeable Canadian direct investment abroad moderated the overall net inflow over the quarter.

Personal income increased $84.9 billion (0.5 percent) in October according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $81.7 billion (0.5 percent) and personal consumption expenditures (PCE) increased $86.9 billion (0.6 percent).

Real DPI increased 0.3 percent in October and Real PCE increased 0.4 percent. The PCE price index increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.1 percent.

The increase in personal income in October primarily reflected increases in wages and salaries, proprietors’ income, and government social benefits to persons. Farm proprietors’ income increased $11.6 billion in October, which included subsidy payments associated with the Department of Agriculture’s Market Facilitation Program.

The $56.5 billion increase in real PCE in October reflected an increase of $14.3 billion in spending for goods and a $41.4 billion increase in spending for services. Within goods, spending for prescription drugs was the leading contributor to the increase. Within services, the largest contributor to the increase was spending for household electricity and gas. Detailed information on monthly real PCE spending can be found in Table 2.3.6U.

In the week ending November 24, the advance figure for seasonally adjusted initial claims was 234,000, an increase of 10,000 from the previous week's unrevised level of 224,000. The 4-week moving average was 223,250, an increase of 4,750 from the previous week's unrevised average of 218,500. The advance seasonally adjusted insured unemployment rate was 1.2 percent for the week ending November 17, unchanged from the previous week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending November 17 was 1,710,000, an increase of 50,000 from the previous week's revised level. The previous week's level was revised down by 8,000 from 1,668,000 to 1,660,000. The 4-week moving average was 1,667,750, an increase of 19,750 from the previous week's revised average. The previous week's average was revised down by 1,750 from 1,649,750 to 1,648,000.

The inflation rate in Germany as measured by the consumer price index is expected to be 2.3% in November 2018. Based on the results available so far, the Federal Statistical Office (Destatis) also reports that the consumer prices are expected to increase by 0.1% on October 2018.

In November 2018, the harmonised index of consumer prices for Germany, which is calculated for European purposes, is expected to increase by 2.2% year on year and by 0.1% on October 2018.

The final results for November 2018 will be released on 13 December 2018.

The consumer price index is revised and a new base year introduced at regular intervals. From reference month January 2019, the index will be rebased from 2010 to base year 2015. In this context, the consumer price indices will be recalculated as of January 2015.

• Challenges Include Trade Tensions, Stress in Emerging Markets, Concerns Around High Debt

• A Cliff-Edge Brexit Could Pose Risk to Eurozone Financial Stability

The USDCAD pair dropped on Wednesday as well, brought down by the dovish Powell and weakening greenback, but the decline was not as steep as elsewhere. On Thursday, the pair was actually a bit higher during the London session, changing hands at 1.3290.

The important upward trend line stands at 1.3250 and while above, the outlook seems bullish. This is the major support and if not held, further decline toward 1.3160 or 1.3120 might occur. Dropping below these two zones could change the outlook to bearish, with the target at 100-day average near 1.3065.

On the upside, the resistance could be at 1.3315 and then at Wednesday’s highs near 1.3360.

Oil continues to plunge and is now seen at fresh cycle lows below the 50 USD level, which is negative for the Canadian Dollar and therefore the upside potential for the Loonie seems capped.

Disclaimer:

Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or an investment advice by TeleTrade. Indiscriminate reliance on illustrative or informational materials may lead to losses.

On the New York Mercantile Exchange, West Texas Intermediate futures were down 1.1% at $49.75 a barrel, falling below $50 a barrel for the first time in almost 14 months.

Oil prices were hit by another wave of heavy selling Thursday, with fears of climbing production dragging the two most popular benchmarks to lows not seen in more than a year.

The net amount of new consumer borrowing, excluding mortgages, was £0.9 billion in October. Within this, net credit card borrowing was slightly lower than September, at £0.4 billion, while borrowing for other loans and advances was slightly higher at £0.5 billion. Since July, the net flow of consumer credit has averaged £1.0 billion, somewhat less than an average flow of £1.5 billion since early 2016.

The annual growth rate of consumer credit slowed further in October, to 7.5%, reflecting the weaker lending flows seen in recent months. This was the lowest since May 2015, and well below the peak of 10.9% in November 2016.

The number of mortgages approved for house purchase has been broadly stable for the past couple of years, and ticked up to 67,000 in October, the highest since January 2018. The number of approvals for remortgaging was unchanged on the month at 49,000.

• Core Of Financial System Is Ready For Whatever Form Of Brexit That Takes Place

In October 2018, household expenditure on goods bounced back by 0.8% in volume, after a sharp decline in September (−2.0%). This rebound was notably driven by the increase in food consumption (+0.9%) and manufactured goods (+0.8%).

In October, food consumption rose (+0.9%), after two consecutive months of decline (−0.9% in September and −0.5% in August). This rise came from the increase in the consumption of agricultural products (after four months of decline) as well as from the dynamism of meat and meat products consumption. Tobacco consumption increased slightly after two months of downturn.

In Q3 2018, GDP in volume terms accelerated slightly: +0.4% after +0.2%. Household consumption expenditures recovered (+0.4% after −0.2%). Total gross fixed capital formation grew almost as quickly as in the previous quarter (GFCF: +0.9% after +0.9%). Overall, final domestic demand excluding inventory changes accelerated: it contributed 0.5 points to GDP growth, after 0.2 points in the previous quarter.

Imports stepped back in Q3 (−0.3% after +0.5%), whereas exports recovered (+0.4% after −0.1%). All in all, foreign trade balance contributed positively to GDP growth, +0.2 points, after −0.2 points in Q2. Conversely, changes in inventories contributed negatively to GDP growth (−0.3 points after +0.2 points).

EUR/USD

Resistance levels (open interest**, contracts)

$1.1481 (3449)

$1.1451 (2712)

$1.1428 (2872)

Price at time of writing this review: $1.1383

Support levels (open interest**, contracts):

$1.1341 (5227)

$1.1314 (2443)

$1.1279 (4280)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date December, 7 is 124607 contracts (according to data from November, 28) with the maximum number of contracts with strike price $1,1200 (5759);

GBP/USD

Resistance levels (open interest**, contracts)

$1.2969 (2027)

$1.2919 (1035)

$1.2887 (595)

Price at time of writing this review: $1.2835

Support levels (open interest**, contracts):

$1.2810 (2512)

$1.2796 (2838)

$1.2777 (3226)

Comments:

- Overall open interest on the CALL options with the expiration date December, 7 is 58588 contracts, with the maximum number of contracts with strike price $1,3500 (4724);

- Overall open interest on the PUT options with the expiration date December, 7 is 47088 contracts, with the maximum number of contracts with strike price $1,2500 (4465);

- The ratio of PUT/CALL was 0.80 versus 0.80 from the previous trading day according to data from November, 28

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

Retail sales in Japan were up a seasonally adjusted 1.2 percent on month in October, according to rttnews.

That exceeded expectations for an increase of 0.4 percent following the 0.2 percent decline in September.

On a yearly basis, retail sales surged 3.5 percent - again beating forecasts for an increase of 2.7 percent following the downwardly revised 2.1 percent gain in the previous month (originally 2.2 percent).

Sales from large retailers fell 0.8 percent on year, missing forecasts for a gain of 0.8 percent following the 0.4 percent increase one month earlier.

Actual expenditure (volume terms):

• The trend volume estimate for total new capital expenditure fell by 0.4% in the september quarter 2018 while the seasonally adjusted estimate fell by 0.5%.

• The trend volume estimate for buildings and structures fell by 1.6% in the september quarter 2018 while the seasonally adjusted estimate fell by 2.8%.

• The trend volume estimate for equipment, plant and machinery rose by 1.3% in the september quarter 2018 while the seasonally adjusted estimate rose by 2.2%.

Expected expenditure (current price terms):

• This issue includes the fourth estimate (estimate 4) for 2018-19.

• Estimate 4 for 2018-19 is $114,099m. This is 4.4% higher than estimate 4 for 2017-18. Estimate 4 is 11.3% higher than estimate 3 for 2018-19.

• See pages 7-10 for further commentary on expectations data.

• Disorderly Scenario Assumes "Severe" Holdups Of Goods At UK Border

• In Disorderly Scenario, 100,000 Migrants Leave UK Each Year

• Stress Tests Incorporate Disorderly Brexit Scenario

• Banking System Strong Enough To Withstand Disorderly Brexit

• Disruptive, Disorderly Scenarios Both Involve No Deal, No Transition

• "Less Close" Deal Would See GDP 0.75% Lower Than Nov Forecast By End-2023

• "Mechanical" Response Would See Bank Rate Rising "Gently" Under Close, Less Close Deals

• "Disruptive" Departure Would See GDP 7.75% Lower Than If No Brexit Vote By End-2023

• "Disruptive" Deal Would See GDP 4.75% Lower Than Nov Forecast By End-2023

• "Mechanical" Response To Inflation Would See Bank Rate Peak At 5.5% In Disorderly Brexit

• Disorderly Scenario Assumes UK Would Lose Access To Trade Deals Between EU And Others

• Releases Brexit "Scenarios," Says Not Forecasts Since Many Details Unknown

• Rates "Won't Necessarily" Follow "Mechanical" Path Set Out Under Brexit Scenarios

• Rate Response Will Depend On Balance Of Hit To Demand, Supply

• Under "Close" Post-Brexit Relationship, GDP 1.25% Lower Than If No Brexit Vote By End-2023

• "Close" Deal Would See GDP 1.75% Higher Than Nov Forecast By End-2023

• GBP Could Appreciate By 5% Under "Close" Brexit Deal

Federal Reserve Chairman Jerome Powell ignited a market rally Wednesday by saying interest rates are "just below" broad estimates of a level considered neutral, a setting designed to neither speed nor slow economic growth.

Investors welcomed his remarks because they appeared to retreat from a comment he made in early October describing the Fed's benchmark rate as a "long way" from a neutral level -- which implied to some listeners that Mr. Powell planned to keep raising rates for a while. His remarks Wednesday suggested to such investors that the Fed might stop sooner or move more slowly.

Mr. Powell did not provide any more guidance on the likely path for rates, and noted they remain low by historical standards.

He offered nothing to dispel market expectations of another rate increase at the Fed's policy meeting on Dec. 18-19.

"There is no preset policy," he said. "We will be paying very close attention to what incoming economic and financial data are telling us."

The strong, continuous growth phase enjoyed by the Swiss economy for one and a half years was suddenly interrupted. Switzerland is thus following the significant economic downturn seen at the same time in other European countries, particularly Germany.

Both the industrial and service sectors contributed to the negative quarterly result. Value added in manufacturing dipped slightly (−0.6%); however, in the context of the particularly dynamic growth of the past few quarters, this amounts to a normalisation at a high level. In the energy sector too, value added decreased after two extremely positive previous quarters (−2.2%), with the dry summer resulting in production downtime at hydropower plants. In line with the fall in production in these sectors, exports of industrial goods and energy decreased sharply. Total exports of goods** (−4.2%) also contracted substantially. At least, October’s foreign trade figures are already indicating a swift recovery.