FX Outlook: BRICS Quietly Leaving the Treasury Market

EUR/USD Technical Analysis

The Euro has started to drift a little bit lower again during the Friday session as it looks like we are in fact going to see more continuation of this consolidation. That was my base case a few days ago; if you had been watching then, I don't think we would have broken out. I think we don't have anywhere to be.

So, 1.18 I think continues to be a ceiling that extends about 50, maybe 75 pips. And then the floor is probably 1.15, maybe 1.14. With this being the case, I do think that we start to drift lower, and in fact, that's already starting to happen. So, I am bearish, short-term. In the intermediate term, I'm probably neutral. Longer term, I think I'm still bearish, but that obviously can change in a few months.

GBP/USD Technical Analysis

The British pound looks very much the same in the sense that it can't break over the recent ceiling at 1.34, so with that being said, I think you have a scenario where we could start to fade a bit. I mentioned yesterday that if we could break down below the Wednesday lows, I think this thing starts to unravel. We go down to the 1.32 level and then 1.30. I still believe that's the case. However, if we can break above 1.35, then obviously something changed, and it's very likely we're going higher.

EUR/GBP Technical Analysis

With the price action that we've seen in both the Euro and the pound against the US dollar, they are doing almost nothing against each other. We are sitting at a support level in the form of 0.8750, which continues to be important. It had previously been significant resistance, and now we're trying to figure out whether or not the breakout and the pullback lead to a rally towards 0.89, or if we break down.

If we break down below 0.87, then I think the market will probably unravel a bit, maybe goes looking for the 200-day EMA. But as things stand right now, this is a neutral with a slightly bullish connotation to it. But really, this is more short-term trading back and forth than anything else.

Source: FX Empire

Source: morningstar

U.S. crude oil prices were stable on Friday after President Donald Trump told NBC News that he will not rule out war with OPEC member Venezuela.

"I don't rule it out, no," Trump told the news outlet in a phone interview. He declined to say whether overthrowing President Nicolas Maduro is his goal.

"He knows exactly what I want," Trump told NBC. "He knows better than anybody."

The oil market right now is not indicating a major risk of a supply disruption. U.S. crude oil rose 29 cents, or 0.5%, to $56.44 per barrel, while global benchmark Brent was up 31 cents, or 0.5% to $60.31.

The U.S. benchmark fell to four year lows earlier this week as traders priced in the possibility of a peace agreement in Ukraine that would bring more Russian crude into a well supplied market.

Trump has been ramping up pressure on Maduro. He ordered a blockade of sanctions oil tankers off the South American nation's coast after seizing a vessel a last week.

The U.S. has staged a major military buildup in the Caribbean and launched deadly strikes on boats that it claims are trafficking drugs to the U.S. The legality of those strikes is disputed and has been the subject of scrutiny by Congress.

Venezuela is a founding member of OPEC and has the largest proven oil reserves in the world. It is exporting about 749,000 barrels per day this year with at least half that oil going to China, according to data from Kpler. Venezuela exports about 132,000 bpd to the U.S., according to Kpler.

Source: CNBC

Source: reuters

The board of the John F. Kennedy Center for the Performing Arts, which President Donald Trump filled with allies during a broad takeover earlier this year, decided on Thursday to add Trump's name to the institution, horrifying Democrats and raising questions about the legality of the change.

Trump, a Republican who is serving his second term as president, has been eager to put his stamp on Washington and his name on buildings. The administration recently added his name to the United States Institute of Peace building near the White House.

Democrats who serve on the Kennedy Center board said it could not change the name without congressional approval.

After taking little interest in it during his first term, Trump launched a revamp of the Kennedy Center shortly after returning to power. He ousted its chair and installed a new board that made him chair instead. He also fired the center's longtime president, tapping Richard Grenell, a former ambassador to Germany, to run it in her place.

The addition of Trump's name is the latest and perhaps most visible change he and his allies have made to an institution that for decades has been seen as a living memorial to Kennedy, who was assassinated in 1963.

"The Kennedy Center Board of Trustees voted unanimously today to name the institution The Donald J. Trump and The John F. Kennedy Memorial Center for the Performing Arts," Center spokeswoman Roma Daravi said in a statement. "The new Trump Kennedy Center reflects the unequivocal bipartisan support for America's cultural center for generations to come."

The Center did not respond to a question about whether congressional approval was required or would be sought for the new name.

DEMOCRATS OBJECT

U.S. Representative Joyce Beatty, a Democrat and ex officio board member, said she had not been allowed to weigh in on the change during the meeting. "For the record. This was not unanimous. I was muted on the call and not allowed to speak or voice my opposition to this move," she wrote on X.

Beatty and other ex officio members including Senate Democratic leader Chuck Schumer and House of Representatives Democratic leader Hakeem Jeffries said participants were prevented from speaking at the meeting. Ex officio board members receive their positions because of their government roles and through an act of Congress.

"Beyond using the Kennedy Center to reward his friends and political allies, President Trump is now attempting to affix his name to yet another public institution without legal authority," they said in a statement. "Federal law established the Center as a memorial to President Kennedy and prohibits changing its name without Congressional action."

Daravi said the full board was invited to attend in person and "the privilege of listening in on the meeting was granted to all members, even those without a vote, such as ex officio member Joyce Beatty."

Earlier this month Trump hosted the Kennedy Center Honors, the institution's flagship awards show for the arts, and referred to it as the "Trump Kennedy Center" at one point from the stage. Yet on Thursday, he told reporters he was surprised and honored by the board's decision, while adding that his administration is "saving" the center's building through fundraising and renovation efforts.

"We saved the building," Trump said. "The building was in such bad shape, both physically, financially and every other way."

Trump has complained that the center had become run-down and has worked to raise funds, including at a performance of "Les Miserables" this summer, to make renovations.

"Congratulations to President Donald J. Trump, and likewise, congratulations to President Kennedy, because this will be a truly great team long into the future!" White House spokeswoman Karoline Leavitt said on X.

Kennedy's grandnephew, former U.S. Representative Joe Kennedy, said the board did not have the right to change the Center's name.

"The Kennedy Center is a living memorial to a fallen president and named for President Kennedy by federal law. It can no sooner be renamed than can someone rename the Lincoln Memorial, no matter what anyone says," he wrote on X.

Source: Reuters

New York Federal Reserve President John Williams said Friday that "technical factors" likely distorted November's inflation data, pushing the headline reading lower than it otherwise would have been.

"There were some special factors of practical factors that really are related to the fact that they weren't able to collect date in October and not in the first half of November. And because of that, I think the data were distorted in some of the categories, and that pushed down the CPI reading, probably by a tenth or so," Williams said on CNBC's "Squawk Box."

"It's hard to know, we'll get some when we'll get to December date, I think we'll get a better reading of how much that distortion, how big the effect was, but I do think that that was pushed down a bit by these technical facts," he added.

The consumer price index rose at a 2.7% annualized rate last month, a delayed report from the Bureau of Labor Statistics showed. Economists polled by Dow Jones expected the CPI to have risen 3.1%.

Because the October CPI release was canceled, Thursday's report lacked several of the standard data points typically included in a CPI report. The Bureau of Labor Statistics said it could not go back and collect October survey data, though it relied on "nonsurvey data sources" to construct the index.

As a result, economists may be cautious about interpreting the report as clear evidence that inflation is on a sustained downward path, given the absence of an October comparison.

Source: CNBC