- Labour day holiday Monday
- Market participants still trying to gauge the extent of EM weakness. China outlook concerns to be highlighted by August trade report. More bad news and the "risk off" trade will be back in vogue.
- Save the date: Septemebr 17th. Absence of key US data to leave markets guessing over September Fed move. Uncertainty in global equities into the close of last week, but USD marginally stronger.
- Super Thursday: MPC to remain cautious amid uncertain external backdrop, the Minutes this week will likely speak about a weawker inflation outlook. Gbp remains weak.
- ECB keeps Eurozone on life support via QE while the FED prepares for liftoff: the policy divergence trade is alive & well, and will most likely keep the Euro subdued.
- Another key policy divergence trade remains UsdCad. With depressed commodities and slow domestic growth, the BoC is closer to cutting rates than it is to raising them. Hence, whether the FED hikes or not, UsdCad seems poised higher.
2. Charts Illustrating the themes:
Dax showing indecision...equity markets waiting for a cue.
The FX charts, instead, are where the best opportunities lie
(for the time being, until something changes).
Good Luck!
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