China's exports or outbound shipments to the US fell by 23% in November to register its fourth straight monthly decline and the worst monthly drop since February.
Meanwhile, imports of American goods declined by 2.8%, giving China a trade surplus of $24.6 billion with the US.
The slide in China's exports to the US comes during the 17-month long trade war between the US and China.
As a result, President Trump may feel emboldened to take more aggressive steps against China. Its worth noting that a tariff spike on $160 billion of Chinese goods is scheduled for next week.
WTI drops to sub-$59.00 area during early Monday. The pair’s failed to provide a decisive break beyond 200-week Exponential Moving Average (EMA) and 50% Fibonacci retracement of October-December 2018 fall.
The energy benchmark now seems to extend declines towards $57.00 while an upward sloping trend line since early October, at $55.90, can act as an intermediate halt to its downpour towards 38.2% Fibonacci retracement of $55.50.
During the black gold’s declines below $55.50, August month low near $50.50 and $50.00 round-figure will be on the Bears’ radars.
On the flip side, a weekly closing beyond 50% Fibonacci retracement level of $59.60 can take aim at a multi-month-old descending resistance line, at $61.33.
However, the price rally beyond $61.33 enables the Bulls to question September high of $63.13 while also targeting the yearly top surrounding $66.60 during further upside.
Trend: Pullback expected
The Wall Street Journal (WSJ) cited people familiar with the negotiations, as saying that the US, Canada and Mexico are edging closer to a new NAFTA, United States-Mexico-Canada Agreement (USMCA).
House Democrats and U.S. Trade Representative Robert Lighthizer are nearing a deal for Congress to pass a modified U.S. trade agreement with Canada and Mexico.
Though hurdles remain.
Have narrowed differences over key sticking points in recent days.
The biggest divide is over revising the agreement on the enforcement of labor rules.
Earlier today, Mexican Foreign Minister said that Mexico will not accept US labour inspections in USMCA trade pact.
Meanwhile, the Canadian dollar seems uninspired by the trade-positive headlines while its American counterpart consolidates the US NFP data-led upside. The Mexican Peso trades firmer near 16-day highs vs. the US dollar, as USD/MXN extends six-day losing streak to near 19.24 region.
In the view of the analysts at ING Bank, the latest OPEC+ decision to deepen the output cuts are unlikely to have any significant effect on the market.
“Oil markets got a boost on Friday after OPEC+ agreed to deepen production cuts over 1Q20 by 500Mbbls/d, taking total cuts to 1.7MMbbls/d. While cuts of 500Mbbls/d are not overly bullish, given that OPEC+ are already over-complying with the current deal, what made the announcement constructive (and a surprise to the market), was the fact that Saudi Arabia said it will produce around 400Mbbls/d below its new quota level. This would effectively take OPEC+ cuts to 2.1MMbbls/d.
While this is clearly more than the market was expecting and has been constructive in the immediate-term, the key question is whether this is enough. We do not expect that these cuts will bring the market to balance over 1Q20.
However, the cuts will take a significant surplus down to less daunting levels. The deal is still set to last only through until the end of 1Q20, while the balance sheet continues to show a large surplus over 2Q20.
Therefore, assuming no significant changes in expectations of non-OPEC supply growth, we would expect that OPEC+ would have to roll over the deal through until the end of June 2020, though the level of cuts will likely revert back to 1.2MMbbls/d from the current 1.7MMbbls/d. This decision will likely be made in early March when OPEC+ is set to meet once again. “
USD/INR may witness a bounce on Monday, having created an inverted hammer at the 50-day moving average support on Friday.
The US economy added 266,000 jobs in November, beating the median estimate of 156,000 additions by a big margin and the jobless rate edged down to a 50-year low, the Nonfarm Payrolls report showed on Friday.
With the upbeat data, traders priced out prospects of a 25 basis point rate cut in 2020, sending the US dollar higher across the board.
The payrolls data was released post-INR trading hours. Put simply, the USD/INR market is yet to price in the upbeat data and the pair will likely gap higher on Monday.
A close above 71.31 would confirm a bullish hammer reversal pattern on the daily chart. On the downside, acceptance below the 50-day average at 71.11 may invite stronger selling pressure. The sellers failed to keep the pair below the average in the previous two trading days.
Trend: Bounce likely
Brian Martin, Analyst at Australia and New Zealand Banking Group (ANZ) warns over getting overly bullish on GBP ahead of the Dec 12 UK election.
“Opinion polls point to a Conservative victory in this week’s election. But it is not a foregone conclusion by any means. We caution about getting overly bullish on GBP ahead of the vote.
The main parties are courting voters with higher spending. Labour’s radical vision for the economy could lead to a fundamental re-mapping of the private sector’s equilibrium, beyond anything Brexit could ever do.
If Johnson wins, the UK will leave the EU on 31 January. He aims to agree an EU trade deal next year. That is highly unlikely. An extension to transition or some temporary tariff-free trade arrangement would be more pragmatic.”
Gold is lacking a clear directional bias in Asia, having registered its biggest single-day decline in four weeks on Friday.
The yellow metal is currently changing hands at $1,460 per Oz. Prices fell 1.05% on Friday. A bigger loss was last registered on Nov. 7, when prices had dropped by 1.46%.
Traders priced out prospects of a 25 basis point rate cut by the Federal Reserve (Fed) next year following Friday's blow out Nonfarm payrolls report.
As a result, the yellow metal nosedived from $1,480 to $1,460 and now appears on track to extend losses to support at $1,450 (Nov. 26 low).
China's exports to the US fell by 23% in November, the biggest drop since February and the twelfth straight monthly decline, according to official data released on Saturday.
The sustained drop in China's exports to the US may embolden the Trump administration to take more aggressive steps in the future. Note that another round of US tariffs on Chinese goods is due next Sunday.
As a result, gold may find love, especially if equities and Treasury yields feel the pull of gravity. Currently, the futures on the S&P 500 are reporting marginal losses and the US 10-year yield is showing little signs of stress at 1.84%.
Also, the technical outlook would turn bullish only above the Dec. 4 high of $1,484.
Shohrat Zakir, the governor of the Chinese far western region, Xinjiang told reporters in Beijing on Monday that a recent US measure on Xinjiang is a severe violation of international law and gross interference in China's internal affairs.
Counter-terrorism measures in Xinjiang are no different to anti-terrorism measures in the US.
The US so-called bill has no regard for facts.
It has made groundless accusations against the human rights situation and the Chinese government.
Expresses strong condemnation of the US bill.
Any attempt to disable Xinjiang is doomed to fail.
The risk tone continues to remain tepid at the start of the week, as market digest the latest downbeat Chinese trade data, trade deal optimism while nervousness creeps in ahead of the UK elections, Fed and ECB rate decisions this week. USD/JPY trades flat around 108.60 while S&P 500 futures post small losses.
Speaking at a meeting of senior financial and economic officials on Monday, South Korean Vice Finance Minister Kim Yong-beom said his government “will act swiftly and boldly upon (its) contingency plans in case volatility in the financial market rises,” as cited by Reuters.
“There were possibilities of volatility increasing in financial and foreign-exchange markets if the United States imposes additional tariffs against China on Dec. 15.”
On the recent foreign capital outflow in the benchmark KOSPI index, Kim said “it was because of rising external uncertainties and MSCI index rebalancing.”
Meanwhile, USD/KRW trades with moderate gains near-daily tops of 1,190, as the US dollar continues to benefit across the board on stronger NFP data and trade deal optimism.
The ING’s Robert Carnell casts doubts on the polls concerning the United Kingdom’s (UK) election on December 12. The reasons cited include the historical performance of the polls and a thin majority in certain seats by the ruling Conservative Party.
"As we head towards the polls in the UK's de-facto second referendum on Brexit, it looks as if Boris Johnson's Conservative party is heading for a majority, and therefore, Brexit will become a reality."
"The polls have been very wrong before, and there are a number of seats that the Conservatives hold by a very thin majority, so even a small underperformance in terms of votes could mean a disproportionate loss of seats and a hung parliament."
"That could hit sterling hard if it happens."
GBP/USD is currently trading at 1.3145, representing a 0.10% gain on the day.
The pair fell 0.19% on Friday, snapping the five-day winning streak.
Friday's drop also validated the overbought or above-70 reading on the 14-day relative strength index (RSI).
As a result, a pullback, possibly to the 5-day moving average (MA) support at 1.3106, could be in the offing. A bounce from the 5-day MA could yield a convincing move above Friday's high of 1.3165.
Prime Minister Boris Johnson's Conservative Party has extended its lead over the Labour Party to 14 percentage points from 9 percentage points seen a week ago, according to an opinion poll by Survation for ITV.
So, a strong bounce from the 5-day MA cannot be ruled out.
Trend: Pullback likely
In its quarterly report, the Bank for International Settlements (BIS) revealed that falling market volatility has prompted some global banks to route more volumes onto their internal platforms, which has led to a drop-in turnover on some of the world’s biggest currency-trading platforms over the past three years.
“Electronic trading between banks on the world’s biggest platforms — owned by Refinitiv, partly owned by Thomson Reuters and EBS, part of the CME Group, among others — has fallen by 7% to $368 billion per day in 2019 from a similar survey three years ago.
The BIS, known as the central bankers’ bank, noted these electronic inter-dealer brokerage systems, which are central to FX trading, now constitute only for a small portion of the turnover in the market even though they remain essential in price discovery.
This trend has also been helped by a drop in currency market volatility to record lows. For example, trading ranges in the euro/dollar last week, the world's most actively traded currency pair, was the narrowest in two decades.”
The BIS said: The falling share of inter-dealer trading has gone hand-in-hand with a handful of banks coming to dominate FX volumes.
USD/CAD rises to an intra-day high of 1.3262 by the press time of early Monday. The pair holds on to recovery gains while confronting 21-Day Simple Moving Average (DMA).
Although sustained trading beyond the 21-DMA level of 1.3260 opens the gate for a 200-DMA level of 1.3280, the Bulls can’t be said to have full control as November month high near 1.3330 keeps them challenged.
Should there be a clear run-up above 1.3330, tops marked in October and September near 1.3350 and 1.3385 will return to the charts.
Alternatively, 61.8% Fibonacci retracement level of September-October fall around 1.3250 acts as immediate support, a break of which could drag prices to 50% Fibonacci retracement figure of 1.3213.
It’s worth mentioning that 1.3160/55 area including lows marked on November 19 and December 05 can restrict pair’s declines below 1.3213.
On what is to be a bust week from the American calendar and quiet for Australia, AUD/USD is slightly offered in a relatively quiet session post-Nonfarm Payrolls Friday. AUD/USD climbed to 0.6857 before the US data, but then fell to 0.6824 and starts the week around 0.6835. AUD/USD is trading between 0.6828 and 0.6838 in the open this week.
Firstly, the US Nonfarm Payrolls headline rose 266k in November, beating expectations by a 86k margin with October revised by +28k. Additionally, the unemployment rate fell from 3.6% to 3.5%, underemployment fell from 7.0% to 6.9%, although the participation fell from 63.3% to 63.2%, albeit within the upward trend. Hourly earnings rose 0.2%mth, 3.1% YoY.
The US dollar bounced in line with US yields. US two-year treasury yields rose from 1.58% to 1.64% following the data, settling at 1.61%. Meanwhile, analysts at Westpac explained that markets are pricing a near-zero chance of easing at the Fed’s 11 Dec meeting but a terminal rate of 1.28% (vs Fed’s mid-rate at 1.63% currently). "Markets are pricing a 65% chance of easing at the Feb RBA meeting, and a terminal rate of 0.38% (RBA cash rate currently at 0.75%)," the analysts explained.
At the same time, the US-China trade deal optimism painted a positive background for the currency and regional markets. The state-run Xinhua News Agency said that China’s State Council began the process of exempting some soybeans and pork imported from the US from punitive tariffs, accompanying the news of confirmation from Beijing that indeed a 'phase-one' deal is "on track".
In other developments, we had China’s November trade balance which cam out over the week which disappointed at CNY274bn (vs CNY300bn expected).
Valeria Bednarik, Chief Analyst at FXStreet explained that AUD/USD settled around the 50% retracement of its November slump, meeting sellers at the next Fibonacci resistance at 0.6865:
In the daily chart, the pair is developing below bearish 20 and 100 SMA, both converging around the 0.6800 level, while technical indicators hold within positive levels, although lacking strength upward. In the 4-hour chart, the pair offers a neutral-to-bullish stance, holding just above directionless 20 and 200 SMA, as technical indicators hover around their midlines, without offering directional clues. The pair would need to break above 0.6865 or below the 0.6800 figure to attract speculative interest.
Analysts at Australia and New Zealand Group (ANZ) provide their insights into the latest Chinese commodity trade data released on Sunday.
“China’s commodity imports for November were stronger than expected, suggesting economic growth has stabilized after Q3’s softness. With trade tension keeping inventories relatively low, import demand should be well supported into the year-end.
Crude oil imports reached another monthly record high, as independent refiners reacted to a hike in the import quota. LNG imports staged a sharp reversal, after weak October volumes. Low prices are likely to spark some opportunistic buying.
Copper imports for November jumped, recording the highest volume for 2019. Unwrought copper imports rose 12% m/m to 483kt, while concentrate imports were up a similar amount. On a seasonal basis, copper imports were up 5% y/y.
Iron ore imports continued to level-off from September’s high, suggesting supply issues are still constraining the seaborne market. However, subdued demand from steel mills would not have helped. Coal imports fell from October, amid tighter import restrictions in China.”
Goldman Sachs analysts have raised their 2020 Brent oil price forecast to $63 from $60 as they expect the global oil supply-demand balances to be 0.3 million barrels per day tighter than previously forecasted.
The upward revision of the price target comes after the OPEC and Russia decided to deepen the existing 1.2 million barrels per day cut in output by additional 500,000 barrels per day through the end of March 2020.
Analysts have warned of the potential for lesser compliance by Iraq, Nigeria, and Russia.
Analysts have maintained the 2020 US shale production growth forecast at 600kb/d.
USD/CNH takes the bids to 7.0300 as Chinese markets open for Monday’s trading. Traders might have reacted to the weekend data from China while trade pessimism and negative headlines from Hong Kong could have acted as additional forces.
China’s November month Exports fell unexpectedly to -1.1% versus +1.0% forecast whereas Imports rose, +0.3% against -6.4% prior, for the first time since April. Further, Trade Balance of $38.73B lagged behind $46.3B market consensus.
Even so, China’s Global Times shrugs of the trade war with the United States (US) to be the reason to worry. Also contributing to the risk-off was the Financial Times (FT) report suggesting Beijing’s order to all government offices to stop using foreign personal computers (PCs) and software within a time span of three years. Additionally, Bloomberg reported the news of the biggest pro-democracy protest in months on Sunday while anticipating more unrest to follow in 2020.
Given the market’s uncertain times ahead of the US decision on December 15 tariffs on the Chinese goods, such downbeat headlines weigh on risk tone and stop the US 10-year treasury yields around 1.84%, ignoring the Friday’s run-up.
Investors will now keep eyes on trade headlines and the US reaction to the Hong Kong protests, not to forget China’s restrictions on PC and software usage, for fresh impulse.
A four-week-old rising trend line near 7.0220 limits the pair’s immediate declines towards early-November lows near 6.9920. Alternatively, November 11 top around 7.0535 can limit the pair’s short-term upside.
The People's Bank of China has set the Yuan reference rate at 7.0405 versus Friday's fix at 7.0383.
A potential global growth rebound could bode well for the single currency, pushing EUR/USD higher to 1.15 in the next 12 months, according to analysts at Goldman Sachs.
"If our forecast for better global growth proves correct, the most interesting G-10 exchange rate next year might be the beleaguered euro."
EUR/USD, however, is likely to remain around 1.10 in the next three months, as the fundamental signals are not yet bullish – there are no signs of European or global growth rebound.
At press time. EUR/USD is trading largely unchanged on the day at 1.1056.
The price of a barrel of oil shot higher on Friday with West Texas Intermediate spot reaching as high as $59.81 from a low of $57.68.
The Organization of the Petroleum Exporting Countries and its allies, (OPEC+) finally agreed to cut production by 500,000 barrels per day on top of its current reduction agreement which will start in in the beginning in January, bringing total cuts to 1.7billion barrels a day.
"Ultimately, this is synonymous with an attempt to distribute Saudi's over-compliance, but does not materially change the group's total output. We suspect that hopes that the cartel would deepen their output curtailment will be pared back in the coming days. Hence, we continue to expect WTI and Brent prices to revert lower in the coming days," analysts at TD Securities explained.
Meanwhile, the strong US Nonfarm Payrolls was positive for risk and a bullish addition for oil prices. The headline rose 266k in November, surging past expectations by a huge 86k margin with October revised by +28k. Additionally, the unemployment rate fell from 3.6% to 3.5%, underemployment fell from 7.0% to 6.9%, although the participation fell from 63.3% to 63.2%, albeit within the upward trend. Hourly earnings rose 0.2%mth, 3.1% YoY. subsequently, US stocks lifted the benchmarks into a positive close, correlating with oil prices, with S&P index +0.91, NASDAQ index +1.0% and the Dow industrial average +1.22%.
On Friday, there was news that the state-run Xinhua News Agency said that China’s State Council began the process of exempting some soybeans and pork imported from the US from punitive tariffs, also helping to boost sentiment on Friday and underpinning the recent confirmation from Beijing that indeed a 'phase-one' deal is "on track".
NZD/USD has formed a double top bullish reversal pattern on the hourly chart with neckline support at 0.6546.
Acceptance below the neckline would confirm a double top breakdown and open the doors for 0.6517 (target as per the measured move method).
The hourly chart MACD histogram is already reporting bearish conditions with a below-zero print. Further, the 14-day relative strength index (RSI) is hovering above 70, signaling overbought conditions.
So, a double top breakdown cannot be ruled out - more so, as traders now see the Federal Reserve keeping rates on hold until after November 2020 Presidential Elections.
Prior to Friday's blowout Nonfarm Payrolls data, traders were expecting the Fed to deliver one rate cut in 2020.
Trend: Pullback likely
EUR/USD rises to 1.1060 amid the initial trading session on Monday. In doing so, the pair recovers from 50-Day Simple Moving Average (DMA) but stays below a confluence of 100-DMA and 38.2% Fibonacci retracement of October month upside.
Bullish signals from 12-bar Moving Average Convergence and Divergence (MACD) favors the pair’s upside past-1.1065/70 immediate resistance confluence. However, 23.6% Fibonacci retracement around 1.1110 could question Bulls afterward.
In a case where buyers dominate after -1.1110, October month high surrounding 1.1180 will be their favorite.
On the contrary, pair’s declines below the 50-DMA level of 1.1055 can fetch prices to 50% Fibonacci retracement, around 1.1030.
Though, multiple rest-points near 61.8% Fibonacci retracement figure of 1.1000 can challenge bears during additional south-run.
In light of the latest third quarter (Q3) Gross Domestic Product (GDP) numbers from Australia, Bill Evans from Westpac anticipate that the Reserve Bank of Australia (RBA) and the Australian government will lower their future growth forecasts. However, the analyst still supports the Westpac estimation of 2.4% GDP figure for the year 2020 following a 2.3% increase in 2019.
The Australian economy grew by a disappointing 0.4% in the September quarter for an annual growth of 1.7%.
Of most concern is that this represents the fifth consecutive quarter where private final demand, which declined by 0.3% in September, either contracted or was flat.
The contraction in the dwelling construction cycle continued into the September quarter.
The Federal Government and the Reserve Bank will be disappointed with this result. A lift in annual output growth from 1.6% to 1.7% is hardly a “gentle turning point” when private final demand contracted by 0.3% following a 0.1% contraction in the June quarter.
Despite a solid boost to incomes, the cautious consumer has chosen to lift its savings rate and hold spending effectively flat. The lift in savings is over and above the policy stimulus - suggesting heightened risk aversion.
It seems likely that the Reserve Bank will need to lower its optimistic growth forecast for 2020 of 2.8% given it is underpinned by a lift in consumer spending growth to 2.4% (compared to the current 1.2%) and a 6.2% lift in business investment.
As discussed, that compares with the Reserve Bank’s forecast in November of 2.8%. Accordingly, we expect that the RBA, while unlikely to follow Westpac’s forecast exactly, will revise down its 2020 growth forecast from 2.8% to 2.5%. A revision in growth from trend to below trend would represent an appropriate opportunity to deliver on the next rate cut from 0.75% to 0.5%.
We expect that cut will be eventually followed by a further cut in June to 0.25%, a little after the Commonwealth Budget which will be released on May 12.
Westpac has argued strongly that the Commonwealth government should bring forward the personal income tax cuts which have been legislated to begin from July 2022. Such a policy initiative would boost the consumer spending profile through the second half of 2020 and in 2021.
The bid tone around the Japanese Yen strengthened following the upbeat Japanese gross domestic product (GDP), but so far, the EUR/JPY cross has been able to avoid a drop below the psychological level of 120.00.
Japan’s economy grew an annualized 1.8% in July-September, much more than the initial estimate of a 0.2% expansion, the Cabinet Office reported a few minutes before press time. The upward revision bettered the estimate for a 0.7% by a big margin.
On a quarter-on-quarter basis, GDP expanded 0.4%, compared with a 0.1% growth in the initial reading and beating the median forecast of 0.2% growth.
Further, Japan's current account surplus JPY 1,816.8 billion in October compared to the median estimate of JPY 1,797.8 billion and up from the preceding month's JPY 1,612.9 billion.
EUR/JPY dropped 13 pips to hit a session low of 120.00 immediately following the release of the better-than-expected data at 23:50 GMT. Currently, the pair is trading at 120.04, representing marginal losses on the day.
The psychological support of 120.00 could be breached, as the futures on the S&P 500 are currently reporting a 0.15% decline. The technical outlook is also bearish with the daily chart showing a downside break of the trendline connecting Nov. 14 and Nov. 25 lows.
AUD/JPY trades around 74.20, after flashing a low of 74.17, on early Monday. The quote reacted to Japan’s upbeat Gross Domestic Product (GDP) and Trade Balance data.
Japan’s third-quarter (Q3) GDP (QoQ) rose beyond 0.2% expectations and 0.1% preliminary forecast to +0.4% while the yearly figure stood unchanged at 0.6%. Further, Japan’s October month Trade Balance on the Balance of Payments (BOP) basis crossed ¥1.1 B prior with a whooping ¥254 B.
Read: Japanese GDP Q3 beats expectations by 0.2%
The pair now seems to decline towards near-term rising support line, at 74.00. However, 23.6% Fibonacci retracement of November month fall, near 73.90, can stop the further downpour.
Should there be additional weakness past-73.90, the previous month’s low near 73.35 will be on the Bears’ radar.
Meanwhile, 200-bar Simple Moving Average (SMA) and an immediate falling trend line limit the pair’s near-term upside around 74.35/40.
In a case prices rally beyond 74.40, 61.8% Fibonacci retracement close to 74.80 and November 10 high around 75.00 could return to the charts.
USD/JPY seesaws around 108.60 during the Asian session on Monday. The quote shows a less reaction to upbeat growth figures from Japan. Even so, pair’s sellers keep dominating the moves ahead of the key week.
The final reading of Japan’s third-quarter (Q3) Gross Domestic Product (GDP) grew past-0.2% forecast and 0.1% preliminary expectations to +0.4% on QoQ basis. Though, the yearly figures matched no change expectations of 0.6%. Further, Japan’s Trade Balance on Balance of Payment (BOP) Basis for October crossed ¥1.1 B prior with a whooping ¥254 B.
Market’s risk tone seems to fail to extend the previous gains as traders turn cautious ahead of the key week that comprises key central bank meetings and the general election in the United Kingdom (UK). Though, recent polls concerning the British election seem to keep the ruling Conservatives Party at the top and recede fears of the UK’s political trauma.
Also exerting the downside pressure on risk sentiment is the trade tussle between the United States (US) and China. The US tariffs of China are up for taking place on December 15 and the Trump administration wants a phase-one to turn the tariff’s switch off. However, Beijing seems not in a mood to respect the US, despite supporting agricultural demand, as recent headlines from the Financial Times (FT) and Global Times have been quite downbeat.
As a result, the S&P 500 Futures fails to extend the Friday’s recovery while taking rounds to 3,145 whereas the US 10-year Treasury yields also seesaw near 1.84% and stop the latest run-up.
Given the lack of major data/events up for publishing, traders may look for trade/political headlines for fresh impulse.
50-day Simple Moving Average (SMA) level of 108.55 offers the immediate support ahead of November month low near 108.20. On the upside, 109.00 acts as nearby resistance whereas 109.70 and 110.00 will be on the Bull’s radar then after.
Japan's third-quarter Gross Domestic Product final was expected to be revised up to +0.2% from +0.1%.
The data has arrived as follows:
USD/JPY was steady around 108.62 on the release, despite the big beat annualised. The market's focus is elsewhere considering the count down to the 15th December deadline which will determine whether there is a trade deal or new tariffs on Chinese goods. On Friday, the state-run Xinhua News Agency said that China’s State Council began the process of exempting some soybeans and pork imported from the US from punitive tariffs. Also, US Nonfarm Payrolls was a huge beat and the combination of positive trade news and solid US data would be expected to continue to support an upside bias for USD/JPY.