Merkel fails to form coalition as FDP pulls out of talks

The biggest story of the day comes from Germany, with Angela Merkel failing to put together a coalition government. This came about after the Free Democratic Party (FDP) walked away from coalition talks, with Merkel now left hanging.

The Chancellor has for months now been trying to put together a coalition government consisting of her Christian Democratic Union (CDU), Christian Social Union (CSU), the pro-business FDP, and the Green party.
The Social Democrats had earlier stated that they won’t be forming a coalition government with Angela Merkel.

EUR

The euro was affected due to the current situation in Germany and Angela Merkel’s failed coalition government. The pair of EUR/USD decreased by 51 points at -0.43% trading at 1.1736; EUR/JPY also went down by 72 pips at -0.55%, ending the session at 131.47, while the pair of EUR/GBP decreased by 28 pips at -0.31% to end the session at 0.8891

E.U.’s Barnier speaks

The top Brexit negotiator for the EU Michel Barnier made a speech during the London session. His speech was rather hostile. He stated that the EU countries would shy away from trade deal if Britain decides to move away from the European trade mode.

EUR

After performing poorly during the Asian session, the euro bounced back during the early stage of the London session, before taking a hit and staying that way until the end of the session. What made the euro surge during the early trading session was unknown. Analysts stated that the currency was shaking off the earlier effects from Germany that affected it negatively.

The pair of EUR/USD increased by 28 pips at +0.24%, ending the session at 1.1782, EUR/JPY also went up by 45 points by +0.35%, trading at 132.13,

GBP

The sterling started well due to the optimism surrounding Brexit negotiations. That optimism was short lived though after Barnier made some harsh comments in his speech.

Pair of GBP/USD decreased by 6 pips at -0.04%, ending the session at 1.3240, GBP/CAD also increased with 13 pips at +0.08%, to end the session at 1.6927.

Major Economic Events: November 20th-24th

Here are the events that are slated to happen during the week.

• US Existing Home Sales: Tuesday, 15:00. The transactions in the housing sector are mostly second-used. The data released back in September was 5.39 million, a figure that was above the annualized sales. For October, the figure is expected to be around 5.42 million.
• Janet Yellen talks, Tuesday, 23:00. The outgoing Fed Chair will speak in New York, with the meeting in December expected to be the highlight of her speech.
• US Durable Goods Orders: Wednesday, 13:30. This is a very important data as it is part of the GDP. When the September data was revised, a gain of 2% was recorded by headline sales. Core durable orders also went up by 0.7%. For October, both data are expected to increase by 0.4%.
• US FOMC Meeting Minutes: Wednesday, 19:00. The minutes of this meeting for this month will be released. It is important because there was no press conference or forecast concerning the meeting.
• UK GDP (second release): Thursday, 9:30. The first GDP release for Q3 showed that U.K’s economy increased by 0.4% more than the first two quarters of the year. This is slow growth when compared to other major countries in Europe and U.S.
• ECB Meeting Minutes: Thursday, 12:30. The minutes of ECB’s meeting back in October will be released. The minutes will likely reveal the bank’s plan to reduce their bond-buying scheme. The ECB has concluded to reduce it to 30 billion euros per month starting from January till September next year.