EUR/USD, GBP/USD
On Thursday, the euro is expected to decline, while the British pound stood still until reports came out that British Prime Minister May is prepared to pay £20 billion in order to secure a transitional deal at key talks on December 14. Today, during the Asian session, the pound added nearly 50 points. The first push to raise the pound was retail sales in the October estimate, which showed an increase of 0.3% against the forecast of 0.1%. In the US, industrial production surpassed expectations for growth: the rise in October was 0.9% against expectations of 0.5%, while capacity utilization increased from 76.4% to 77.0%. The index of business activity in the housing market from NAHB for November increased from 68 to 70, against the expectation of a decline towards 67. This gives the possibility of better data on new housing starts that will be released today - the forecast is at 1.19 million versus 1.13 million previously.
Returning to the US, President Trump managed to reason with the House of Representatives regarding the draft tax reform, and he gained support. At the moment, it is the Senate's turn, which is also not against tax cuts, even with the cancellation of the so-called Obama's individual mandate - that is, the cancellation of fines for the lack of insurance. This can be called a partial victory of Trump over Obamacare. We see this as the result of arrangements for the preservation of the Fed for the sponsors of the Democrats. It is no coincidence that yesterday, key figures from Goldman Sachs and Morgan Stanley acted with the support of tax reform. The US stock market snapped its previous three-day decline - an increase of 0.82%.
The number of issued permits for the construction of new houses in October is expected to reach 1.25 million against 1.23 million in September. For the euro area, the balance of payments in the September estimate is projected at 30.2 billion euros against 33.3 billion a month earlier.
Unfortunately, the market is getting warm again. Technically, the British pound may reach 1.3320 unless a decisive attack is made during the US session on European currencies. In general, it can be noted that the pound is less adamant on reacting to news on Brexit negotiations. For the euro, a decline towards 1.1670 is expected.
USD/JPY
US stock indexes showed good growth on Thursday. On Friday, the Nikkei 225 added 0.39%. However, the yen cannot tear itself away from the lower limit of the 112.50-113.35 range. Presumably, the military coup in Zimbabwe does not provide investors with confidence on positive medium-term prospects. Yields on Japanese government bonds are falling across the entire range of securities. For 5-year bonds, it went from -0.11% to -0.12%. Furthermore, in China, authorities have decided to fight financial bubbles, as it announced its intention to introduce a property tax.
Optimism remains regarding the growth of the market. Next week, the US expects a number of strong indicators, which includes the 2nd estimate for GDP for the third quarter with a forecast of 3.4%, while growth in orders for durable goods in October is expected to be at 0.6%. We are waiting for the yen in the range of 113.35/60 with a further rise towards 114.40.