Treasury And Dollar Selling Go Hand-In-Hand

Note that the House of Representatives approved a bill that the Senate did a few months ago that would force companies (Chinese) to be denied listing on US exchanges if the accounts could not be audited by US officials. Unlike some other measures that the US has implemented, which seem at least partly aimed at reducing the options for the next administration, this bill provides a three-year phase-in period and draws bipartisan support. As we have argued, the shift in US policy from trying to curb China's expansion through trade to its integration of the capital markets appears to have begun. 

US data today include the weekly jobless claims, where a new problem has been identified. Apparently, the statistical method has used the number of weeks of claims as a proxy for the number of individuals receiving assistance. The national November figures will be released tomorrow. The Markit final services and composite PMI may not be quite as good as the initial readings, and the ISM services index is also on tap. Canada's economic release calendar is light ahead of tomorrow's employment report. Mexico reported a continued recovery in its domestic auto sales yesterday (November) and today reports vehicle production and export figures. Brazil sees Q3 GDP (Bloomberg survey median forecast is for 8.7% growth after a 9.7% contraction in Q2). The Markit service and composite PMIs are also due, and the recovery looks to be carrying into Q4. 

The US dollar extended its slump to a new 2020 low against the Canadian dollar today to just above CAD1.29.It recovered to CAD1.2940 in the European morning, where new offers lurked. It may take a move above CAD1.2960 to stabilize the tone. On the downside, there may be mild support in the CAD1.2860-CAD1.2880 area, but the next big chart point is the low from October 2018 near CAD1.2785. The greenback is pinned near its trough against the Mexican peso that extends a little below MXN20.00.  It has found support this week (yesterday and today) near MXN19.96 and last week's lows were nearer MXN19.94. 

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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