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“The New York Fed Staff Nowcast for 2018:Q4 stands at 2.6%,” the Federal Reserve Bank of New York announced on Friday.

Key quotes

• News from this week’s data releases decreased the nowcast for 2018:Q4 by 0.1 percentage point.
• Negative surprises from industrial production and capacity utilization data were only partially offset by a positive surprise from retail sales data.

US President Trump is now delivering his remarks on the trade conflict with China.

Key quotes (via Reuters)

• China wants to make a deal on trade, but it is not acceptable yet.
• U.S. may not have to impose further tariffs on China.
• Hopefully U.S. Will make a deal with China, but U.S. has to have reciprocal trade.
• China’s trade list is pretty complete.
• China’s list of trade proposals is pretty complete.

• EUR/USD rises to 1.1419 and losses momentum but holds to important weekly gains. 
• A weaker US Dollar across the board supported the rally. 

The US dollar extended losses and pushed EUR/USD further above 1.1400. The last move lower came after a US President Trump mentioned China wants to make a trade deal. He said it was not acceptable yet and that they may not have to impose more tariffs. 

The pair rose to 1.1419, hitting a fresh weekly high. Near the end of the week, it is trading at 1.1410/15, consolidating weekly gains. The euro has risen 200 pips from the 2018 low it hit on Monday at 1.1215. 

The move higher took place amid a correction of the greenback across the board. The DXY hit the highest since June 2017 above 97.50 and on Friday fell under 96.50. For the EUR/USD pair so far is being the best week since September. 

The strong bounce from the lows could offer signals that a bottom is in place, pointing to some potential consolidation. The key level to the upside is 1.1500: a confirmation above would add more strength to the euro. On the flip side, a slide below 1.1300, could clear the way for a test of YTD lows. 

Week ahead

In the Eurozone, the European Commission is expected to deliver its final opinion on the Italian budget. The ECB will release the minutes from its latest meeting on Thursday and PMI data is due on Friday. In the US, also the PMI readings are due on Friday and previously housing data will be released. Brexit and UK political development are likely to continue to be watched closely. 
 

In an interview with CNBC, Former British Brexit Secretary Davis claimed that Prime Minister Theresa May’s Brexit deal with the EU will be rejected by the Parliament.

Key quotes (via Reuters)

• PM May “will have to come up with another alternative” to Brexit deal with EU.
• Of course EU would say they will not accept any changes to Brexit deal.
• We can reopen renegotiations.
• The EU has spun this out to use time against us.
• Negotiations with EU have not been concluded.
• It is a dreadful proposal.
• The EU has things to lose if there is no deal.
• When asked about leadership of the conservative party says I do not get into criticism of the PM when I am abroad.
• Can renegotiate for a free trade deal in four months.
• Nobody prefers no deal, it is not something to be terrified of.

Crude oil weekly chart

• Crude oil has erased the yearly gains as it plunged below the 58.00 level.

Crude oil 4-hour chart

• Crude oil gave back most of its intraday gains this Friday as it tested the 58.00 level. 
• However, giving the recent bullish momentum, it is likely that bulls will give another try at breaking above 58.00 before a break to a new 2018 low. 

Crude oil 30-minute chart

• Crude oil is evolving in a bull channel supported by the 100-period simple moving average. 

Additional key levels at a glance: