EUR dips after ECB; USD supported by strong unemployment data

Summary:

• Euro dips as ECB confirm end of QE

• Central bank decisions also from SNB, Norges Bank and CBRT

• US jobless claims fall near record lows

• Pound pauses as May seeks assurance from Brussels

• Stock of the week: Chevron

The final ECB rate decision of the year has been a momentous occasion but unfortunately due to the announcement being widely expected it has failed to provide any large moves in the markets. All the key rates were held unchanged once more, and it now looks increasingly likely that President Draghi will serve his entire 8-year term having not presided over a single rate hike. The decision also confirmed that the ECB will halt its bond buying programme this month while stating that reinvestment of maturing debt will go beyond the date of the first interest rate increase. The Euro is sliding lower after the ECB although the moves remain fairly small and measured.

This morning we got monetary policy decisions from three central banks from Switzerland, Norway and Turkey. Neither of them decided to change interest rates though. You can read more on the individual statements here.

The latest look at the US labour market has delivered some surprisingly good news with the number of people claiming unemployment benefits falling more than expected. The initial jobless claims for the past week came in at 206k vs an expected 226k, down on the prior reading of 233k (revised higher from 231k beforehand). The 4-week moving average fell to 224.75k vs 228.5k previously.  

After surviving a vote of no confidence, albeit in a manner that wasn’t as convincing as she would have hoped, UK PM Theresa May is now turning her attention back to Brussels as she bids for further legal assurances over the Irish backstop. The pound is little changed on the day as the markets digest the latest events with the residing feeling one of short-term relief that May hasn’t been ousted, but a large cloud of uncertainty continues to hover threateningly overhead.

The latest steep sell-off on the oil market raised questions whether prices did not fall so low to make a bulk of oil production unprofitable. However, most of the oil companies earn enough at periods of high prices to allow them survive oil price declines and even keep rising dividends. Chevron Corp (CVX.US) is one of such companies. In this analysis we will take a look at Chevron’s planned investments in 2019 as well as how the company compares with major rivals.