You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. My new Coaching Page is also online.
Here is this week's Game Plan:
There was no news out over the weekend, but this week will be a busy one. Late Friday, Merkel and Xi Jinping discussed overcapacity in world steel markets and agreed to work on solutions, emphasised close ties between the two countries, both facing planned US steel and aluminium tariffs. The Merkel-Xi call came amid tensions between the United States, Europe and China over US. tariffs, and China's rejection of US legislation encouraging an exchange of officials between the United States and Taiwan.
Trade issues aside – it is the FOMC decision on Wednesday that will be the main event in the week ahead and we will be holding a Webinar on it. While a Fed hike is nearly 100% discounted, the market will watch the Fed’s economic forecasts, the “dot plots” and the press conference by Powell. The Bank of England and RBNZ also meet in the week ahead, but there is no change expected from either central bank. The RBNZ meeting may get some attention, as it will be the first meeting for new RBNZ Governor Orr. The BOE is expected to remain on hold, but the market will look for guidance on what is on store for future meetings.
The UK/EU Summit on Thursday/Friday will also be a focus for the FX market, with the usual hopes of the UK negotiations making headway.
Datawise, the only prints will be UK CPI, UK Retail Sales and UK employment plus AU employment data.
As of Friday's close, the FX market positioned for risk aversion with Aud & Cad weakening vs. Jpy & USD. GBP is also holding up. FX might be positioning for a trade war, whereas other markets are fairly steady. What will emerge we do not yet know, but going into the week I will still be looking for AUD & Cad weakness vs. USD/JPY/GBP. Crude might be worth watching as well (to the topside).
domenica 18 marzo 2018
domenica 11 marzo 2018
Weekly Game Plan 12.3.18
You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. My new Coaching Page is also online.
Here is this week's Game Plan:
Trump opened the door to more exemptions from his steel and aluminum tariffs on Friday, after pressure from allies and intense lobbying from lawmakers, opening up to Australia but at the same time still coming down hard on Europe and China. There is still the potential for a flare-up if Trump takes further steps to punish China or the EU, but for now the market is back focusing on fundamentals. NFP and wages were weaker than expected and investors relaxed their rate hike assumptions a tad, with equities soaring in a broad risk-on tone.
Going into the week, this global growth/low inflation theme that drove markets during 2017 might continue as the only data to watch is US CPI along with US Retail Sales and NZD GDP.
Going into the week I remain bullish on Aud & Cad vs. Euro and Jpy; I also remain bullish US equities.
Here is this week's Game Plan:
Trump opened the door to more exemptions from his steel and aluminum tariffs on Friday, after pressure from allies and intense lobbying from lawmakers, opening up to Australia but at the same time still coming down hard on Europe and China. There is still the potential for a flare-up if Trump takes further steps to punish China or the EU, but for now the market is back focusing on fundamentals. NFP and wages were weaker than expected and investors relaxed their rate hike assumptions a tad, with equities soaring in a broad risk-on tone.
Going into the week, this global growth/low inflation theme that drove markets during 2017 might continue as the only data to watch is US CPI along with US Retail Sales and NZD GDP.
Going into the week I remain bullish on Aud & Cad vs. Euro and Jpy; I also remain bullish US equities.
domenica 4 marzo 2018
Weekly Game Plan 5.3.18
You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. My new Coaching Page is also online.
Here is this week's Game Plan:
This week will be truly intense. We have a perfect storm of potential Trade War escalation, Election outcomes and Central Bank meetings.
On Saturday, Trump threatened European automakers with a tax on imports if the EU does not accept unilateral US tariff decisions. Trump is going against common sense and history. Here is what a Bank of Canada study understood many years ago:
“The trade literature suggests that increases in tariffs by one region against another will benefit the region that imposes the tariff, but harm that region which is its target—the so-called “beggar-thy-neighbour policy.” As past experience has shown (particularly the Great Depression), a beggar-thy-neighbour policy eventually escalates into a worldwide tariff war, and theory suggests that everyone loses in such an outcome.”
While it's true that Trump has not yet applied any tariffs - and there is a possibility that he takes back his word - businesses will be bracing for impact and further uncertainty is not welcomed by the markets.
In other news, Germany's SPD backed a grand coalition which gives Merkel the green light for another tenure. The Euro might get some love from this, if the Italian election outcome shows a hung parliament (as expected). The Euro will only come under pressure if there is some kind of radical majority of the 5-Star party. Otherwise, the markets will not pay much attention.
This week we will get 4 Central Bank meetings (RBA, BoC, ECB & BoJ), Fedspeak, Non-Fram Payrolls, Canadian Employment, Australian GDP.
As of Friday's close, we had weakness in Cad vs. strength in Euro and Jpy. Beyond this, the Dax also looks poised for further losses.
Here is this week's Game Plan:
This week will be truly intense. We have a perfect storm of potential Trade War escalation, Election outcomes and Central Bank meetings.
On Saturday, Trump threatened European automakers with a tax on imports if the EU does not accept unilateral US tariff decisions. Trump is going against common sense and history. Here is what a Bank of Canada study understood many years ago:
“The trade literature suggests that increases in tariffs by one region against another will benefit the region that imposes the tariff, but harm that region which is its target—the so-called “beggar-thy-neighbour policy.” As past experience has shown (particularly the Great Depression), a beggar-thy-neighbour policy eventually escalates into a worldwide tariff war, and theory suggests that everyone loses in such an outcome.”
While it's true that Trump has not yet applied any tariffs - and there is a possibility that he takes back his word - businesses will be bracing for impact and further uncertainty is not welcomed by the markets.
In other news, Germany's SPD backed a grand coalition which gives Merkel the green light for another tenure. The Euro might get some love from this, if the Italian election outcome shows a hung parliament (as expected). The Euro will only come under pressure if there is some kind of radical majority of the 5-Star party. Otherwise, the markets will not pay much attention.
This week we will get 4 Central Bank meetings (RBA, BoC, ECB & BoJ), Fedspeak, Non-Fram Payrolls, Canadian Employment, Australian GDP.
As of Friday's close, we had weakness in Cad vs. strength in Euro and Jpy. Beyond this, the Dax also looks poised for further losses.
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