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Uncertainty in the United States has been killing the lackluster of the dollar. US indices has been hitting new highs and recent report for US GDP showed a stronger quarter. But analysts and investors are worried that this might be a rally before a recession comes along. A day before the US was supposed to imposed additional tariffs to Chinese goods, the US and China signed a phase one trade deal, which could finally end the trade war. Just four (4) days after the signing, however, US President Donald Trump was impeached by the House of Representative. Following the impeachment was the ratification of NAFTA (North American Free Trade Agreement). Analysts saw these efforts as interference to the possibility that President Donald Trump might trigger the next US recession. Currently, the US has the longest expansionary period in history. The last recession was during the 2008 Global Financial Crisis (GFC).
Turkey has been stirring the status quo after it called out for a Russian-backed mercenary in Libya. In recent months, Turkey came under fire from the European Union and the United States after it purchased a Russian-made missile defense system, the S-400. This was despite the country being a member of the NATO (North Atlantic Treaty Organization) Alliance. In addition to this, Brussels said that the cooperation between Ankara and the European Union will remain strong. Turkey is also set to unveil its homegrown prototype on December 27. This was the latest push by Turkey to stimulate its economy and compete globally. However, recent figures still pointed to a declining Turkish economy. Consumer Confidence report in December was at 58.8 points, lower by 1.9% from the previous month. Sentiment in the general economic situation also decreased by 2.5%. Finally, financial situation expectation for each household also dropped by 2.1% from 2018.
The United States and China were able to compromise and signed their phase one trade deal last week, December 14. This was a day before the United States is set to impose an additional 15% tariffs on $500 billion worth of Chinese goods. Despite this, there are still some unresolved concerns following the call between US President Donald Trump and Chinese President Xi Jinping. Xi told Trump that he will not allow any foreign interference on China’s special administrative regions, Hong Kong and Macau, including Taiwan, which China considered as its wayward province. Hong Kong has entered a recession following month-long protest in the country. China accused the United States of orchestrating the rally to which the US denied. The US Congress also passed a law to review its trade dealings with Hong Kong if it found the SAR to violate certain conditions of the 1997 Hong Kong handover agreement.
Japan is assuming global leadership as the United States pulled out from the rest of the world. Under US President Donald Trump, America has pulled out from several trading pacts and accords. The US withdraw from the Iran Nuclear Deal, from the Paris Accord, from the Trans-Pacific Partnership (TPP), and from the INF (Intermediate-range Nuclear Forces) Treaty. Today, December 20, Iran President Hassan Rouhani visited Japan to renegotiate the Joint Comprehensive Plan of Action. In other news, Japan unveiled its first aircraft carrier loaded with F-35 fighter jets. The move was seen by analysts as a comeback for Japan who is a military power prior to its surrender during World War II. The United Kingdom, on the other hand, is expected to further strengthen its military alliance with the United States once it officially withdraws from the European Union on January 31.
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