Democrats are not giving up their attempts to impeach Donald Trump, trying to deprive the Republicans of any hope in the upcoming presidential election. After all, the Republicans have no other candidate, and if Donald Trump is impeached, they will not have time to prepare for a new candidate for the presidency of the United States. The circus arranged by the Democrats include the participation of several law professors. One of whom agreed to the point where by his actions, Donald Trump seeks to establish a monarchy in the United States, despite all his comicality and absurdity, seriously worries investors. After all, this increases the uncertainty that investors fear like the devil. All previous attempts at impeachment in the history of the United States have failed, and no one can predict the political consequences if everything works out this time. It’s clear that nothing good will happen, because it’s like opening Pandora’s box. Once you release this gin from the bottle, you can’t get it back. In fact, if Democrats reach their goal, then one can forget about the presidential election in the United States since political opponents will regularly impeach each other. Therefore, certain concern of investors which were reflected in yesterday’s weakening dollar, is quite understandable.
However, if you look at at least European statistics, it is quite obvious that there is simply no reason to weaken the dollar. Yes, another assessment of European GDP for the third quarter showed that the pace of economic growth remained unchanged. However, data on retail sales for October showed a slowdown in their growth rates from 2.7% to 1.4%. And not only did they expect a slowdown to 1.8%, they also reviewed the previous results for the worse, from 3.1%. But we are talking about the largest segment of the economy, so the slowdown in economic growth is clearly not far off. As an additional illustration to all this, you can look at retail sales in France, where their growth rate slowed down from 2.6% to 1.4%. At the same time, the previous value was revised from 4.1%, which suggests that that the final GDP data for the third quarter may turn out to be slightly worse than preliminary estimates. So what can I say? even the volume of industrial orders fell by 0.4% in Germany, although it was supposed to grow by 0.3%. Well, the data on Spain became a sort of “cherry on the cake”, as the growth rate of industrial production in 0.6% was replaced by a decline of 1.3%. Now, we were waiting for the acceleration of industrial production growth rates to 1.0%.
Retail Sales (Europe):
American statistics turned out to be clearly better than forecasts, although they were more likely to be negative. They also looked better than European ones to some extent. In particular, the total number of applications for unemployment benefits increased by 41 thousand. They forecasted growth by as much as 68 thousand. Meanwhile, the number of initial applications for unemployment benefits, which should have increased by 13 thousand, decreased by 10 thousand. The number of repeated applications for unemployment benefits increased by 51 thousand instead of 55 thousand. In addition, the volume of production orders increased by 0.3%, although they expected growth by 0.5%. In any case, the picture is somewhat better than in Europe, but the hysteria surrounding the impeachment of Donald Trump has done its dirty work.
Repeated Unemployment Insurance Claims (United States):
It is clear that the focus for today is on the publication of the report of the United States Department of Labor, so investors will not look at anything else since there’s nothing special to watch. With all due respect to Italy, but the expected slowdown in retail sales growth from 0.9% to 0.4% can hardly excite anyone. Thus, all the most interesting will happen in the late afternoon. In connection to this, the unemployment rate is expected to increase from 3.6% to 3.7%. This is partly indicated by recent ADP data. However, this can happen due to the banal increase in the share of able-bodied people in the total population from 63.3% to 63.4%. This also indicates that young people will actively seek work, which means that it is extremely important how things are going with the creation of new jobs. And it’s predicted that the pace of creating new jobs outside of agriculture should increase from 128 thousand to 175 thousand. Therefore, yesterday’s teenagers should find a job for themselves without any problems. In turn, only the growth rate of the average hourly wage, as well as the average duration of the working week, will remain unchanged.
Unemployment Rate (United States):
It is highly possible that the single European currency will decline to 1.1050, given the slight overbought common European currency, as well as expectations for the contents of the report of the United States Department of Labor.
The pound is much stronger overbought due to the election hysteria, as well as the disappearance of all doubts about the victory of Boris Johnson. However, even it will have to take into account the contents of the report of the United States Department of Labor. Thus, it is quite possible to expect a decline in the pound to 1.3075.
The material has been provided by InstaForex Company – www.instaforex.com