Weekly Game Plan 10.12.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

Doubts about the Trump/Xi agreement alongside growth fears (due to the inversion of the US yield curve) drove markets last week and China data released over the weekend isn't any help. Look out below on equities this week as well, since China’s economy is slowing and demand is falling rapidly. If there is a negative reaction in China it will keep the AUD under pressure.
Themes for the week:

• Yield Curve Inverstion & less hawkish FOMC: combined, these themes show deterioration in investor confidence and worries that the US recovery is long in the tooth. The market is also reacting negatively to the less hawkish messaging from the Fed in recent weeks. Watch this week's US inflation numbers as we should react strongly in either direction.
• Trade issues: Trump & Xi will need to do more than have a 90 day truce to get the markets revived. Not even the OPEC meeting was able to produce a solid bounce given small cuts bu members vs. a large oversupply. Commodities overall are in trouble. Without good news from the trade front, especially strong Chinese demand, things are unlikely to reverse.
• Mayday (witty title coined by the folks at Reuters): Tuesday UK PM May’s Brexit deal with the EU is put to a vote in the House of Commons. The weekend press suggests the deal could be rejected by a large and crushing margin. What will happen after is anyone's guess, but GBP is likely to come under intense pressure.
• ECB Decision: the ECB is due to halt it's QE but...will it follow through with a weakening economy, Brexit, Italy's issues and trade tensions? Surely the ECB cannot raise rates. The commentary this Thursday will be influential to say the least.

Data in the week ahead:

• UK GDP
• UK Employment
• Fed’s Powell testifies
• US CPI
• SNB decision
• ECB Decision (should be important due to staff projections)
• US retail sales.

On the Radar:
I remain bearish on equities going into the week, with FTSE & Dax as top contenders. I also like AUD weakness vs. Jpy and Usd. GBP will be in play after the Brexit vote (most likely short) and the Euro post-ECB.

Weekly Game Plan 3.12.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

This week should open up with a gap since Trump & Xi are producing a 90 day cease fire on trade tariffs with the US agreeing to halt planned tariff hikes in exchange for China's commitment to buy more US oil and agricultural products. Both countries have also agreed to further talks on trade. I expect risk assets and Aud, Nzd as well as Jpy crosses to benefit this week.
The French government is considering a state of emergency in response to protests by the so called "gilets jaunes" movement in Paris yesterday which have became violent with demonstrators clashing with police, burning cars and looting shops.This is the 3rd week of the demonstrations which started as an online movement against an increase in fuel tax hikes and has morphed into protests against stagnating wages, a decrease in purchasing power and President Macron himself.
Themes for the Week:

• Fed Chair Powell will appear before the House on Wednesday and Senate on Thursday, but the timing might be altered due to the funerals of George H. Bush.  Powell’s comments last week were viewed as dovish so the market will see if Powell confirms the market’s view.
• US non-farm payrolls to be released on Friday will also play an important role in shaping Fed expectations
• OPEC is scheduled to meet next week and there was already plenty of discussion in the weekend papers about what the cartel could agree on in order to stabilize oil prices and even cause a rally. Russia, one of the world's major crude producing nations, has been bargaining with OPEC's leader, Saudi Arabia, over the timing and volume of any reduction.
• The RBA and Bank of Canada meet in the week ahead and neither central bank is expected to change policy.
• The odds look stacked against UK PM May getting parliament’s nod on Dec. 11. Members of her own Conservative Party, the opposition and the Northern Irish party which props up May’s minority government all oppose it. Furthermore, on Dec. 4, the European Court of Justice’s will decide whether Britain can revoke its notice to withdraw from the EU without agreement of the other 27 states.

Data in the Week Ahead:

• US NFP
• Bank of Canada
• Reserve Bank of Australia
• Australian Current Account, GDP,  trade data and Retail Sales.
• The state of the China economy remains in focus amid fears of slowing growth and the coming week sees the release of the Caixin MFG and Services PMI

On the Radar:
Aud & Nzd closed on a strong note last week and I expect a boost into the new week on Trump/Xi progress. EurAud/EurNzd shorts look good, but also AudJpy/NzdJpy longs. I also like longs on the Dow given these drivers.

Weekly Game Plan 26.11.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

The EU has approved PM May's final Brexit deal...but the game isn't over. Now the UK Parliament needs to approve it sometime in December. It is still unclear whether PM May has the support to pass the deal. Junker said "this is the only deal possible" so it's either this or a hard Brexit. GBP might gain some traction into the week but Parliament has the final say.
Downunder, the Labor government in the Australian state of Victoria won an unexpectedly large majority in an election. The anti-establishment movement is alive & well, and we'll probably see more of this in Australia as the national elections (6 months away) draw near. Aussie was one of the weakest currencies last week and it may come under a bit of pressure on this outcome.
Meanwhile, civil unrest is growing in France against Macron's Diesel tax. Violence will grow proportionally to the lack of food on people's tables. And this brings me to a fairly aggressive comment that finds it's roots in the US Declaration of Independence. Our biggest danger is Government. In France the police shot tear-gas at the protesters, but what will they do if government doesn't make adequate changes and civil unrest grows even more? Government has  the tanks and the bullets! Also, politiians constantly deny that they are the cause of the situation and blame everybody else for their own failures in an attempt to retain power. Will we really degenerate into a "V for Vendetta" kind of situation?
Themes for the Week:

• GBP: While clearing the EU hurdle is a positive development, UK PM May still faces a grueling task of getting the deal through UK Parliament. I am not expecting much form GBP yet, although some positive movement would make sense as we're one step closer to a deal.
• I don't know what to make of the civil unrest in France and Salvini's latest bluff against the EU (let our budget pass or we will force a collapse in government). I think the Euro will take it's cue from the positive Brexit outcome for now. But things just aren't moving in a positive direction here in Europe.
• FOMC Minutes: the USD has stalled since rejecting 98.00 but it remains in a broad uptrend. We expect the FOMC minutes to add some hawkishness to the picture - which the market isn't really discounting as of yet. To note, Black Friday sales started off pretty well - an encouraging sign.
• Trump/Xi meeting on November 30 at the G20 in Buenos Aries. Market expectations of a “deal” to end the US/China trade war have receded following the tense showdown between US Vice President Pence and China President Xi at the APEC Summit. However, Trump's own comments have been upbeat so we would expect a positive outcome.
• Equity market woes: Nasdaq leads the way as tech stocks continue to suffer. I do believe that only a Trump/Xi resolution has the potential to end the correction in the near-term.

Data in the Week Ahead:

• NZD Retail Sales (Sunday)
• RBNZ Financial Stability Report
• UK Bank Stress Tests
• US GDP (revision)
• FOMC Minutes
• CAD GDP.

On the Radar:
After Thanksgiving, markets usually start to wrap up ahead of Christmas but this year I do believe we will continue to trade (cautiously) into mid-December given the outstanding issues. In the meantime, going into the week I remain bearish on Nasdaq, Dow & Crude Oil. I am bearish on EurUsd and EurJpy and will see what happens on GBP.

Weekly Game Plan 19 Nov 18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

The only news from the weekend wasn't on Brexit. The US/China trade dispute was still very much alive at the APEC summit on Saturday, suggesting little prospect of consensus. Watch risk assets, although the Trump/Xi meeting at the end of the month will be much more influential. The Pound will likely remain under pressure as PM May will have to face a confidence vote on Tuesday perhaps. At the time of writing, only 21/22 letters (of the 48 required in order to challenge PM May) have been officially noted so there really isn't anything substantial yet.
Don't forget our Free Webinar on Thursday!

Themes for the Week:

• Brexit Mess: PM May could face a no-confidence vote on Tuesday, and she also has to get her Brexit plan approved by Parliament. After key resignations last week, it seems difficult that she will succeed.
• US/China trade jitters: the APEC summit did nothing to resolve the tension between the 2 parties. Will Trump be able to deescalate tensions with Xi at the G20? His comments certainly suggest it's possible, and have recently aided risk assets (EM & global equities, base metals, Aud & Nzd).
• Crude Oil: we all know that Crude Oil is a key component of inflation expectations, so it wouldn't be a surprize if the recent dovish talk from Fed speakers was due the big drop in Crude. We'll see just how far this goes. For now it remains on everyone's radar.

Data in the Week Ahead:

• UK inflation report hearings
• RBA Minutes
• OPEC Meeting
• ECB Minutes
• CAD CPI & Retail Sales

On the Radar:

GBP remains volatile and I only suggest touching it if you're plugged into a news squawk all day long. Any rogue comment can spur intraday volatility in either direction. It's potentially simpler to get aboard the US/China theme via AUD or NZD vs USD or Euro...and yes for the temerary GbpAud and GbpNzd are the intraday vehicles of choice. Crude Oil remains a sell if we can breach 56.00 once again.

Weekly Game Plan 12.11.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

The Sunday Times is reporting that Four British ministers who back remaining in the European Union are on the verge of quitting Theresa May's government over Brexit as the EU rejected once more May's plan. The Irish border remains the main stumbling block.  Over the weekend Senior Brexiteer Jacob Rees-Mogg and UK Trade Minister Liam Fox were quite bearish on the developments. GBP should come under pressure as the new week opens.
Themes for the Week Ahead:

• As of Friday, the combination of higher US yields, higher USD and tightening in the Libor/OIS started putting pressure on emerging markets and risk assets once again.
• The Brexit issues will continue to dictate Sterling flows in the week ahead amongst influential data releases.
• Italy has until Tuesday to submit a budget to the EU. Both sides remain far apart – with the EU requiring Italy to revise its 2019 budget so that it falls to 0.6% of GDP while Italy insists a rise of 0.8% is needed to support growth for its economy. Expect pressure on the Euro if the stalemate continues.
• China growth concerns are on the rise again and concerns are growing that China will allow the Yuan to weaken to offset the impact of slowing activity and impact of US trade tariffs. A break above the 7.00 level in the USD/CNH would likely put the entire EM complex under pressure. Comments from Trump  regarding the coming meeting with Xi at the G20 will be closely watched by the markets, as will be some key China growth data to be released in the week ahead.

Data in the week ahead:

• Bank Holiday for US & Canada Monday
• UK sees Employment, CPI, Retail Sales
• AU sees Wage Price Index & Employment
• US CPI
• China IP, Retail Sales and Urban Investment will be released in the coming week, as the markets gauge whether or not recent stimulus has helped China maintain growth.

On the radar:
Given the Brexit headlines, I will have GBP (short) vs. USD/AUD/NZD high on the agenda this week. I also like EUR shorts vs. USD/AUD/NZD. Dow remains a buy on dips. Silver, amongst metals, turns to a sell on rallies.

Weekly Game Plan 5.11.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

The main preoccupation this week is the US Mid-Term Elections. Amongst market participants there is nervousness that a Democratic victory in the House will undermine the current US recovery. There seems to be an extreme partisanship brewing in both the ranks of the Republicans and Democrats, which means neither party will easily accept the outcome, and this could lead to further civil unrest. The probability of a political gridlock seems to be highest as neither side can easily win a strong majority.
Over the weekend, we initially saw a report suggesting an all-UK customs deal will be written into the legally binding agreement governing Britain's withdrawal from the EU to avoid the need for an Irish backstop. However, shortly after this was defined as "speculation" by Prime Minister Theresa May's office.  More confusion and more doubts regarding Brexit...will we get a deal around the end of November as Raab had suggested?
Themes for the Week:

• US Mid-Terms: markets will likely remain dormant ahead of the elections. Long story short, a Republican  majority in both Houses will likely result in a knee-jerk reaction to buy equities in anticipation of more tax cuts and bank deregulation; vice-versa, a Democrat majority in both Houses will likely result in a knee-jerk reaction to sell equities, as political gridlock will prevent the rolling out of market friendly policies and there would be a higher probability of deeper probes into the dealings of the Trump admistration.
• US-China trade war: the market is still reacting to this theme in hope of a breakthrough when US President Trump meets China President Xi later this month at the G20 meeting in Argentina. 
• EU-UK deal or no-deal? GBP will remain extremely sensitive to this theme.
• FOMC rates decision: no one is expecting the Fed to move at this meeting and the statement will likely remain the same. There won’t be a press conference by Fed Chair Powel. Nor will there be a release of the “dot-plots”.
• The RBA and RBNZ also meet and neither central bank is expected to move rates, nor are they expected to signal a change in policy anytime soon.

Data in the Week Ahead:

• NZD employment and Inflation Expectations
• UK GDP
• China Trade data and CPI.

On the Radar:
It's tough to make a watchlist ahead of key events. So things may change but I do see weakness in the Euro vs. GBP, NZD, AUD. Jpy pairs also want to rally but they will be even more impacted by the Mid-Terms. The best bet will be to remain flat and re-assess after the elections.

Weekly Game Plan 22.10.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

GBP may come under a bit of pressure as the week opens after a Tory rising star issued a call to arms for MPs to oust Theresa May, saying Britain cannot be led by someone guilty of an “abject failure to govern” at such a defining moment in our history. Indeed, Theresa May's position is weakening. The EU is trying some last-minute concessions and can-kicking exercizes given the importance of Germany car exports to the UK. Now there's also talk of a second Brexit Referendum which would be folly. More political chaos coming fourth.
Themes for the Week:

• The CNH has been weakening and getting dangerously close to the psychologically important 7-mark. This would erode faith in China’s stability and possibly provoke more U.S. ire, adding another layer of worry to world markets — the last thing investors want to see.
• In Europe the storm is brewing with stock market turmoil, conflict over a contentious Italian budget, high oil prices, sputtering economic growth — which will evidently call for a cautious ECB meeting this week. We also have key earnings this week in Europe in the Automotive sector and Financial Sector...the most troubled sectors. Finally, Moody’s and S&P Global are likely to cut Italy’s credit rating next week to within a notch of ‘junk’ — the sub-investment grade category below BBB-/Baa1 which is usually populated by the weaker emerging economies.
• The Bank of Canada has a solid case to make for hiking rates in October. Core inflation is on target, but labour markets are tight. Q3 growth is still tracking above the central bank’s estimate for the economy’s non-inflationary potential, albeit by less than a half percent. The market is also expecting a hawkish tone from the BOC but we shall see.

Data in the Week Ahead:

• Bank of Canada Decision
• ECB Decision
• US GDP

On the Radar:
The Canadian Dollar took a hit on Friday and may remain weak ahead of the BOC. UsdCad, NzdCad are the better vehicles. Nzd looks strong against AUD as well. Out of all the US indices, given the volatile conditions, Nasdaq seems to be clearly heading lower again. The next 2 weeks will surely be challenging on US equities so keep positions small. Eur and Dax will be on the radar after ECB I suspect.

Weekly Game Plan 15.10.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

As we venture further into Q4 2018, expect the markets to be driven more by politics than else. The US elections will be the main focus, but don't dismiss the outcome of the Bavarian election (which is showing the usual anti-establishment trend), the Italian budget issues, the EU/UK Brexit negotiations and the US-China trade debate. These are all political developments that are creating uncertainty and as such, expect volatility and perhaps adopt a shorter-term stance for the time being.

Themes for the Week:

Tomorrow the Italian government must submit its budget to the EU, which will give a negative opinion and ask for a revision of the budget before the end of October. The Italian authorities will then have three weeks to comply with the request and the EU will give its final judgement at the latest by end-November. If Italy does not comply, the EU could launch an Excessive Deficit Procedure (EDP) against Italy, maybe as soon as the beginning of 2019. All this should produce a new leg of volatility in Italian debt as it raises the risk of an anti-EU backlash from League leader Salvini and Five Star leader Di Maio.

The markets will have to price in more political uncertainty in Germany after exit polls project a broad humilaition for Angela Merkel's allies. Just how bad this will be depends on whether anyone from Merkel's coalition steps down (Seehofer?). Remember that Germany has always been the leading country in Europe. To see political fragmentation there is a big warning sign for investors. Expect pressure on the Euro and on the Dax.

The expectations are that EU leaders will yield a deal on Brexit for PM May on the 18th. If the outcome is positive, investors could unwind more of their short sterling bets, setting the currency firmly on the road to recovery. But with less than six months to go before Britain leaves the bloc, fears about the Irish border issue will still hound the pound.

US Earnings: Fifty -five S&P500 firms release earnings including names like Netflix, eBay and twenty-six financials including BofA, BlackRock, Morgan Stanley, Goldman Sachs, US Bancorp, BoNYM, Amex and State Street. While it’s very early, the Q3 earnings season is shaping up rather nicely with about 90% of a small sample to date beating analysts’ earnings expectations including the early read on key financials.

FInally, the equity market sell-off. Is it over? Perhaps. However, the main issue is another: that we are nowhere near a bear market. Ups and downs like this may even become the norm as we head into the US Elections. But more on this in this months' webinar, which will cover the US elections and will be held next week.

Data in the week ahead:

• US Retail Sales
• Bank of Canada's Business Outlook Survey: influential for BOC watchers.
• NZD CPI
• RBA Minutes
• UK Employment Change
• UK CPI
• FOMC Minutes
• AU Employment Change
• UK Retail Sales
• CNY GDP
• CAD CPI & Retail Sales: also influential ahead of the BOC's decision next week.

On the Radar:

There aren't many signs from the currency market going into the week, and the only sign (Jpy strength) may dissipate depending on what global equities do. So it's quite difficult going into the week. GbpJpy (short below 147.00) or EurJpy (short if the Bavarian elections cause havoc) may be two ideas. But for now the game is elsewhere: equities will be the main focus.

A short-terms stance will be more adequate this week, especially with all the headline risk and event risk due.

Weekly Game Plan 8.10.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

Q4 is opening up with a flurry of themes. The Pound is back in favour after some kind of of progress on Brexit talks. China will come back from holidays this week and the market will be watching their reaction to the USD strength and US trade offensive. On top of that, we have higher US yields which will be influenced by Fedspeak this week and US CPI. "Quitaly" is back in the press and  the US earnings season starts on Friday.
Remember that the US and Canada are away tomorrow (Monday).

Themes for the week:

• Brexit is in focus with news on Friday that a deal is close. This Wednesday Barnier is due to present to the EU’s executive European Commission a first draft of the bloc’s proposal for close trade ties with Britain after Brexit. Over the weekend EU President Juncker told an Austrian newspaper that a Brexit deal was close and if it doesn’t get agreed to this month, it will be done so in November. This should enhance the mood on the Pound.
• China cut its RRR by another 100 BPs as it seeks to spark growth and help sentiment that has been damaged by the US/China trade war. Traders will be focused on the USD/CNY fixing, and watch for any move above 7.00 which is the psychological line in the sand which would put even morel pressure on emerging market currencies and create more EM stress generally. This, in turn, could put pressure on AUD which is a proxy for EM sentiment.
• Fedspeak will be watched closely and will possibly influence US yields and USD.
• US earnings season kicks off this week with the main focus on JP Morgan, Citigroup and Wells Fargo – all reporting on Friday. Expectations for the current reporting season are high so it's easy to disappoint.
• Italy is back in focus with ongoing revisions to it's 2019 budget. 2.4% deficit just wasn't acceptable by Brussels but Italy must present a budget to Brussels on Oct. 15  so the pressure is on. Concerns over Italy’s spending plans and what they mean for its position within the EU should dominate bond markets this week since Deputy PM Salvini continues his aggressive posture vs. EU.

Data in the week ahead:

• UK GDP
• US CPI

On the Radar:

GBP is a natural candidate (long) vs. Aud, Nzd & Euro. Aud & Nzd weakness might also be influential in the event of risk-off (if China reacts negatively to the latest developments). Thre may also be further weakness in EU stocks.

Weekly Game Plan 1.10.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

Welcome to Q4 2018. Trade wars, Emerging Market distress (due to unsustainable dollar-denominated debt), FED rate hikes, the surging US dollar – they are all real and present dangers. On top of that, Italy’s Fiscal Defiance could get messier, throwing the euro zone’s third largest economy (and largest debtor) into deeper financial uncertainty as the ECB starts to reduce QE.

Over the weekend, China manufacturing PMI for September disappointed, as US/China trade friction is starting to negatively impact the economy. The falling export orders was a direct result of trade tariffs, according to Chinese companies participating in the survey. This may contribute to a bit of Risk-Off tone as markets get under way this week.

Themes for the Week:

• Canada and the United States are trying to save NAFTA but at the time of writing, no deal has been reported by the press. The CAD was the best performing currency last week – suggesting the market is pricing in the likelihood of a trade deal being struck – although the main drivers were rising oil prices and stronger Canadian data.  If a deal between the US and Canada is finalized, expect decent CAD buying.
• Britain’s ruling Conservative Party kicks off its annual conference. Running from Sunday to Wednesday, the widely-watched event could prove a make-or-break moment for Prime Minister Theresa May. Investors will be watching to see whether May can face down hardline Brexiteers in her party and form a united front before the final stages of EU-UK talks.
• The market will keep a close eye on Italian politics, as the populist coalition appears steadfast in opposing the EU calls for budget restraint.
• Emerging Market Distress can be illustrated in a simple chart

Data in the Week Ahead:

• The RBA meets on Tuesday, but it will likely be a non-event for the markets. The RBA remains firmly on hold and the statement following the meeting will likely be similar to the one released after the September meeting.
• US NFP
• AU Retail Sales
• Canada Employment

On the Radar:

US stocks are still appetizing for buyers going into this week. Depending on what happens today in negotiations, CAD might remain strong and I like it vs. Euro, Chf and Jpy. But the Euro should remain weak agaisnt all comm-dolls so long as the risk-on appetite continues, and especially if the Italian situation escalates. GBP trades will have to wait until after the Conservative Party Conference. Chf continues to weaken amongst the risk-on move and is appetizing vs. Cad & USD.

Weekly Game Plan 24.9.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

Over the weekend UK PM May said Britain would not flinch in an impasse with the EU on Brexit. "This is the moment to do what is right for Britain," May said in the Sunday Express. The Sunday Times is reporting that the PM’s aides have begun contingency planning for a November snap election to help save Brexit talks and maintain her leadership. There seems to be more pain in store for GBP in the near-term.
Themes for the Week: 
Risk appetite continues unchalleneged after China refused to retaliate (for now) against Trump's tariffs, and pledged to keep the Yuan stable and support their economy through fiscal and monetary means. Copper and AUD rallied, and the Dow made new all-time highs. Many analysts believe we will need fresh supportive news to keep this ball rolling. 
The FOMC will be the key event in the week ahead and will likely determine the direction of the USD and US Treasury yields. The market expects the FED to tighten policy amidst strong US data, especially wage inflation. This could kick US10YR yields past 3.13% (current year highs) which will put even more pressure on Emerging Market debt, beyond aiding the US dollar. October may very well be a tumultuos month for bonds if US yields break higher. The 10-year Treasury yield matters because it is the rate against which trillions of dollars of borrowing around the world are referenced. It touches every market in the world.

Keep an eye on the Euro and Italian BTPs. On Sep 27 the Italian Government needs to present it's 2019 budget and it has been quite a roller-coaster ride. Right now, markets still are acting as if Tria will be able to remain within EU rules. But DiMaio and Salvini will likely stir things up.
The RBNZ also meets this week and no-change is expected but whereas the last meeting was dovish, recent GDP data out of New Zealand was better than expected, but that might be enough to lift the tone of the RBNZ.
Data in the Week ahead:

• Not much going on beyond FOMC and RBNZ.
• Some central bank speakers (Draghi, Powell, Poloz)
• US Final GDP
• CAD GDP.

On the Radar:
Going into the week my stance is bearish on GBP vs. USD & CAD. I remain bearish on Jpy vs USD and the comm-dolls. I remain bullish on the Dow. And there is a volatility contraction in Gold which has me waiting for the break on either side.

Weekly Game Plan 17.9.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

This week should pick up where we left off last week: the return of trade war fears, after reports indicated the US will go ahead with imposing tariffs on another 200 BLN USD worth of China imports despite resuming talks with China on contentious trade issues. Stocks may come under more pressure, USD may remain buoyant and EM currencies (alongside the comm-dolls) may come under pressure. However, tariffs are apparently being reduced to 10% instead of the 25% feared. So the markets may not react as violently.
Themes for the Week:

• The US/China trade debate will most likely be the main focus after Trump confirmed 200 Bln worth of Tariffs, but apparently is reducing the impact to 10% from 25%. There is much uncertainty still, so stay nimble.
• A Reuters report said that legal experts believe the Mueller investigation may get energized by news that former Trump campaign chairman Paul Manafort has agreed to fully cooperate with US prosecutors. The saga has the potential to impact markets, as the early November US midterm elections comes into focus.
• The Bank of Japan will decide on monetary policy, but no change and no impact are expected.

Data in the week ahead

• Bank of Japan policy decision
• UK CPI & Retail Sales (the mood is quite negative on Retail Sales after sector bellwether John Lewis told investors that its first-half profit was all but wiped out)
• CAD CPI & Retail Sales
• Draghi speaks
• NZD GDP

What's on the Radar:
Depending on what happens between the US and China, things may change intraweek, but for now here's what is on my list: US equities remain biased to the long side, as do UsdJpy and GbpJpy; Silver remains biased to the short side; AUD & NZD remain weak vs. USD and GBP.
Good Luck!

Weekly Game Plan 10.9.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

The divergence between the US and the rest of the world keeps intensifying. Friday saw an escalation of US/China trade war fears due to Trump comments and a rise in the USD due to a strong NFP report. This is a toxic combination for emerging market countries which typically have large current account deficits and high levels of USD-denominated debt.
The USD flipped back into a positive posture on the back of NFP as you can see here. Despite this fact, we did have some relaxation in the USDTRY as you can see here. However, the markets are also focused on Brasil, Argentina and Russia but also India and Indonesia. Contagion is the main concern so keep your ears on the wires.
Themes for the Week:
The major themes from last week will continue to be influential this week:

• the US/China showdown on trade;
• moves in Emerging markets (is contagion spreading?)
• political drama in Washington with a plethora of attempts to overthrow Trump (although the markets haven't reacted to this yet, but will indeed react if there's any hint of impeachment or serious accusations)

but also

• ECB and BOE meet. No rate changes are expected but the ECB is expected to signal they are ready to commence tapering their bond purchase. There will also be interest in what BOE's Carney says regarding the state of Brexit.

Data in the Week ahead:

• US CPI & Retail Sales
• UK GDP, Employment and BOE meeting;
• ECB meeting
• AU Employment data

On the Radar:
I continue to see AUD and NZD weakness amidst EM stress, US/China tension and technical USD strength. There has been much strength recently in the CHF as a safe haven but the USD is becoming equally favoured. Gbp and Eur might pop onto the list depending on their respective central bank meetings near the end of the week. In equity space, FTSE and DAX remain weak, as is Silver.

Weekly Game Plan 3.9.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

It should be a relatively benign start to the week, and mild pressure might be seen in CAD. Also, during the Asian session we will also have AU Retail Sales. However, the US and Canada are away on holiday tomorrow and as such, there shouldn’t be all that much movement. The rest of the week will be busy.

Themes for the Week:

Has the Trade War impacted US Employment? NFP shall tell. The market expects 187k  in August. NAFTA may have a future yet, after the US sealed a deal with Mexico. However, tensions are still high with Canada as Ottawa “won’t just sign any deal”. Saturday Trump maintained his harsh stance with Canada, which may put some pressure on the Loonie this week.

More Tariffs on China. Chinese stocks may come under more pressure this week as Trump prepares to impose tariffs on another $200 billion of Chinese imports, on top of the $50 bln already taxed in the trade row.

Emerging Markets will still be an attention grabber. The Turkish lira has lost more than 30 percent in August. But Argentina’s peso plunged around 20% last week – more than 10%  in one day – dragging other currencies like the Brazilian real down with it. With the Fed on a hiking path, there may be more pressure to come for EM. We have already seen the market’s reaction: USD bid, CHF bid, Jpy bid in a typical risk-off move. Beware of this.

GBP is an interesting candidate as  parliament returns from summer recess and raises the prospect of more divisive noise over Brexit. EU’s Barnier has become more accomodative recently, helping the Pound gain traction. But the game is far from over. Also coming up on the horizon is the Conservative Party conference at the end of September, where PM May could potentially face a leadership challenge.

RBA and BOC meet this week. While neither central bank is expected to surprise, participants feel the RBA might be a bit more dovish in their statement after West Pac raised their mortgage lending rate and there are “concerns over household debt”. Instead, the market is expecting more of a hawkish stance from BOC but in light of NAFTA issues and worse GDP data recently, will the Bank stick to script?

Data in the week ahead:

• AUD Retail Sales
• RBA decision
• AU GDP
• Bank of Canada Decision
• Cad Unemployment
• US NFP
• UK PMIs.

On the Radar:

Going into the week, I have a bearish bias on Aud & Cad vs. GBP, USD and (with less convinction) Jpy. I’ve got a short bias on FTSE and I remain with a long bias on US equities.

Weekly Game Plan 13.8.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

Themes for the week ahead:

• The coming week looks likely to be another eventful one, with the Turkey crisis dominating.

The Eu is exposed to Turkish banks and the ECB is worried about non-hedged exposure to Turkish companies and if Turkish banks fail, there will be a contagion effect. The only solution is to remove Erdogan by force, because after his discourse on Friday, he seems quite reluctant to do so himself or change course.



Some analysts say a big hike by the Turkish Central Bank will end the Lira rout. I disagree. Central bank intervention works so long as there's confidence in government. But confidence in government is the main reason for the Lira's issues in the first place. I do believe there's a hyperinflation risk around the corner. Here's a chart with key levels going into the week:

• Turkey aside, BREXIT will be back in focus. EU negotiators are due to meet their British counterparts on Thursday and Friday, with concerns growing about the likelihood of a no-deal Brexit if the talks break down.
• China will also be under scrutiny (again) with investors trying to understand what kind of reaction (if any) the Tariff War is generating. To China's benefit, they have been developing a domestic market for goods & services, and are not as dependant on exporting to the US as other countries are.
• Stocks may be vulnerable if Emerging Markets feel more of a squeeze on Turkey (risk-off/contagion) and a stronger USD.

Data in the week ahead:

• Wages and employment data are the focus on the Australian economic calendar
• China releases data on retail sales, industrial production and fixed asset investment.
• In the US there is data out on retail sales.
• The June UK employment report will be released, as well as the CPI for July.

On the Radar:
I don't particularily suggest trading TRY around here. But if you must trade it, ONLY maintain a long-bias on USDTRY and keep positions extremely small, and keep your ear on the wires.
I like the odds of further losses in the Dax due to the European exposure to Turkey, but for those that can, I'd suggest a more granular watchlist of the more exposed European bourses like the IBEX (Spain) or the FTSEMIB (Italy).  In FX I continue to like USD longs vs. Euro and NZD.
Good Luck!

Weekly Game Plan 6.8.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

GBP might be taken to the shed again this week after British trade minister Liam Fox said "intransigence" from the European Union was pushing Britain towards a no-deal Brexit, in an interview published on Saturday by the Sunday Times. The No-Deal Brexit seems to be a real possibility, which would throw more uncertainty into the picture, and weigh on BOE decisions.

Themes for the Week:

GBP weakness may continue based on the above drivers.

The US/China trade dispute continues after the US threatened to increase tariffs on 200 BLN USD worth of China imports from 10% to 25% while China said on Friday they were looking at increasing tariffs on 60 BLN USD worth of US imports. "Such methods of extreme blackmail will not bear fruit against China." was the reply from Beijing. China will be in focus in the week ahead, as the market gauges reaction to the surprise PBOC decision to raise reserve requirements for FX settlements to 20%. China authorities hope the move will cap the USD/CNY and discourage outflows.

The Euro may also be under pressure as we get Italian Bank earnings this week. Last week BTPs were lower on the speculation that the new populist government might push the boundaries of EU rules regarding the next budget plan. The threat of a fresh financial market crisis in Italy has been weighing on the EUR and could start to alter ECB expectations.

Data in the Week Ahead:

• The RBA and RBNZ meet next week and both central banks are expected to remain on hold. The recent run of Australian data has been mostly positive and this might be acknowledged by the RBA.
• US CPI
• UK GDP
• CAD employment

What's on the Radar:

Although the USD is gaining traction, we're not yet clear of the recent range and as such, trading the crosses is probably a better solution for now.

DXY: https://www.tradingview.com/chart/DXY/1euIyK4z-DXY-Pressuring-top-of-Range/

Going into the week I like GBP and EUR weakness vs. AUD & CAD. There's something going on in the JPYs also, but not as evident. SP500 seems poised for further gains.


Good Luck!

Weekly Game Plan 23.7.18

You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. Our best pieces can be found in one placehere. If you want to get an idea for how I trade trends, this webinar will help. If you want to know how I Trade the News, this plan will help. 

Here is this week's Game Plan:

Market participants try to ignore trade war fears but tweets and/or interviews with US President Trump continue to spook them. Over the weekend in a G20 meeting, Mnuchin proposed that all G7 allies drop trade barriers but French FinMIn Le Maire replied “We refuse to negotiate with a gun to our head".

Themes for the Week:

Trade Wars will remain in focus this week and Trump will meet EC President Juncker on Wednesday in hopes it will be the start of dialogue on various trade issues that will end the tit-for-tat tariff impositions. Market participants are actually expecting more trouble, instead of a resolution. China remains in the spotlight, as a growing number of analysts believe Chinese authorities are allowing the Yuan to weaken as part of its strategy to offset the impact of trade tariffs.
The ECB gathers on Thursday and after the excitement generated at its last meeting, this will also be of great interest to those looking for further guidance. Another question will be about the bond redemptions. So far the ECB seems intent on reinvesting in long-dated bonds, thus keeping the stimulus alive.
Nearly 35% of S&P companies report this week – including tech giants Facebook, Amazon and Alphabet. Despite high expectations coming into the Q2 Earnings season – over 85% of the 15% of S&P companies reporting so far have beaten estimates. However, Q2 results also stream in from big European carmakers Peugeot, Fiat, Daimler and Renault. Earnings growth estimates have all taken a beating on the tariff threats and Trump/Junker meeting will also impact automotive stocks this week.

Data in the week ahead:

The main event for US data in the week ahead will be Q2 Advance US GDP, which is expected to come in at 4.1%.
The main event in Australia in the week ahead is Q2 CPI.

What's on the radar:

It seems that (finally) FX markets are starting to worry about Trump's protectionist agenda. JPY was sold into the end of the week and CHF was also bought. USD showed weakness. These current moves are susceptible to headline risk of course (given summer markets/low participation) but going into the week a short USDJPY/GBPJPY stance looks quite decent alongside USDCAD shorts.  DAX also looks poised for further losses as the automotive industry weighs.

Good Luck!