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.

Nessun commento:

Posta un commento