Markets are relatively calm Friday as we await the results of the meeting between President Trump and Chinese President Xi Jinping Saturday night after the G20 Summit.
A Saturday night dinner between the leaders of two of the world’s most powerful countries is more than just a friendly gathering.
President Trump and Xi Jinping will discuss the current trade relations between the two countries and the results of the dinner will determine whether we are going further into a trade war or if there is a path to strike a deal.
That’s at least the premise being pitched by investors and media closely watching the meeting. There is of course a chance there won’t be a major outcome after the dinner. It is just a dinner after all, right?
Most recently, Trade Representative Robert Lighthizer said he would be surprised if the meeting wasn’t a success. But how he defines success might be different than market watchers.
The meeting is taking the spotlight away from the G20 Summit – the reason the two leaders are in Argentina in the first place.
President Trump cancelled a meeting with Russia’s Vladimir Putin at the G20 Summit after Russia’s recent military aggression against Ukraine.
Euro drops on CPI
The consumer price index inflation measurement came out worse than expected for the Eurozone in November, pushing the common currency lower.
Core CPI came out at 1% instead of the 1.1% estimated.
EUR/USD dropped from around 1.138 to 1.135 after the release. The dollar is gaining steam as uncertainty takes control of the markets ahead of the Trump-Xi meeting.
USD/CAD climbs on low oil prices, Canadian GDP
The gross domestic product for Canada in Q3 came out as expected at 2% growth, down from the 2.9% in Q2.
The USD/CAD pair edged lower after the release from 1.331 to 1.329.
As uncertainty resumes ahead of the G20 Summit, the U.S. dollar is gaining on the Canadian dollar, up to 1.332.
Lower oil prices are also playing a role in the USD/CAD direction. A barrel of West Texas Intermediate is back down below $50 this morning after starting the day closer to $51.69