Weekly Game Plan 28.1.19

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 quiet start to the week, with no market moving events released over the weekend. Trump has averted the US government shutdown, without receiving any kind of compromise, and was ridiculed by both sides. Perhaps Trump will try to deal better with China this week.

Themes for the week ahead:

• US/China summit: the market will be watching the trade negotiations on Wednesday/Thursday for clues on whether China might slow down even more (no deal) or whether a deal is made (Expect a big rally in risk assets). Elsewhere, markets will focus on Chinese manufacturing data due on Thursday and Friday.
• FOMC: As we approach the first rates decision of 2019, a darkening global economic outlook and convulsing stock market are clouding the policy picture. Powell is preaching "patience" with regard to future rate increases. Forward guidance will be key.
• Brexit Plan B:  On Jan 29, Britain's parliament will debate PM May's next Brexit steps as well as alternative plans. Reuters reports investors have taken off some option hedges they had put on to guard against sterling downside - as evidenced by the rise in GBP in the past week. If the possibility of no-deal raises its head again, those same investors will scurry back to safety en masse.
• Earnings Season:   Apple (Tues) and Microsoft (Wed) will release earnings this week and represent a tell-tail as global tech struggles to recover from a tumultuous end of 2018.

Data in the week ahead:

• FOMC Decision
• Non-Farm Payrolls
• CAD Gdp
• AU CPI

On the Radar:

Last week the USD ended on a negative note and as such I like the odds of NZDUSD longs and USDCAD shorts this week since even the FOMC statement should be on the dovish side. GBP continues to be the leader but only because option hedges were removed, with participants speculating that a No Deal is being averted. As  I have reminded subscribers, this is yet to be confirmed because effectively there has been no progress in Brexit talks and the EU is not likely to accept May's Plan B. So basically, if you want to play GBP, please do so at 1/2 size or 1/4 size.
I also don't mind EurNzd shorts, adn tentative longs in US equities.

Weekly Game Plan 21.1.19

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 will likely have a slow start, with the US out for Martin Luther King Day on Monday. But later on Monday things will pick up as UK/EU Brexit negotiations are likely to (re)start after May’s latest defeat. May is due in parliament on Monday to reveal her plan on how to proceed. However, on Friday, EU leaders were in 'disbelief' after Theresa May Presented Unchanged Brexit Demands. I still think No Deal is an increasingly likely option.
In other news, the annual conference in Davos will be dull with very few influential leaders attending.
Themes for the Week:

• Brexit: PM May will unveil plan B (if there is one) and Parliament will have to vote on it before Jan 29th. GBP has been rising as chances of "No Deal" seemed to be disappearing, but unless a deal is reached, there's always 2-way risk on the Pound. Expect more volatility this week.
• ECB decision:  Draghi is unlikely to change his stance this week, as EU data has been weak and the slowdown could last longer than anticipated.
• China Slowdown? The coming days will show whether China’s run of weak economic data continues as it releases fourth quarter growth numbers as well as investment and retail sales for December. .
• The US shutdown: there have been no immediate signs of a resolution and we still have no indication of when the delayed BEA and Census Bureau data will eventually be released.

Data in the Week ahead:

• China GDP
• UK Employment Data
• NZD CPI
• BOJ Decision
• Cad Retail Sales
• AUD Employment Data
• ECB Decision

On the Radar:
It's still slim pickings for trend-following strategies since there has been very little trendiness in 2019 thus far. So going into the week the only things that look interesting based on Friday's close are: Crude Oil (long), Dax  (tentative longs, low convinction), NzdCad (short), EurUsd (short).

Weekly Game Plan 14.1.19

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:

There wasn’t any market moving news on the weekend – so it should be a quiet start to another volatile week with a pivotal Brexit vote due on Tuesday and Q3 US earnings season kicking off.

Themes for the Week:

USD: US government shutdown (no resolution in sight, and there is an increasing probability that Trump will declare a state of national emergency), trade negotiations with Japan/EU/UK/China, Q3 Earnings (Citigroup Monday, Wells Fargo and JPM Tuesday, Blackrock, Bank of America, Goldman Sachs and Alcoa on Wednesday, Morgan Stanley Thursday, . The bar is set low regarding earnings expectations so there may be a relief rally in risk assets if we see surprizes. We will also get some Fedspeak out.

GBP: It could be a volatile week for the GBP, as UK Parliament votes on UK May’s Brexit plan. The plan is unlikely going to get enough support to pass, but what happens next is highly uncertain. Analysts expect May to obtain some assurances from the EU and reveal them at the last moment (Monday?) to maximize the impact. The reactions from DUP/ERG will then give us the best expectations regarding Tuesday's vote.

Data in the Week Ahead:

• UK CPI & Retail Sales
• US Retail Sales
• CAD CPI

On the Radar:
Crude Oil (long), Eur (short) vs. Aud, Nzd, Cad are the only things on the watchlist currently. I will be paying close attention to the Pound on Brexit news, and also to equities based on what Q3 earnings season brings. Last week we didn't have much convinction in stocks, with prices printing a small range week, so I'm not too convinced either way and prefer to wait for stronger momentum.

Weekly Game Plan 7.1.19

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 2019 and what a start to the new year, with a flash crash and generally higher volatility in FX. The FED has not helped into th end of 2018 and the market is actually pricing in a rate cut for 2019. With an inverted yield curve (in various parts) and lower PMIs, it's hard to envision clear skies ahead.
There wasn’t any market moving news of note on the weekend but wait for Tokyo before gauging things. Markets were closed in Japan through Thursday/Friday so (most?) Japanese retail traders will have to deal with the flash-crash in the USD/JPY and JPY-crosses. Basically, there may be more position adjustments to be done.
Liquidity is the main issue going into 2019 and is the culprit behind the flash crash. Central banks have been on a tightening path (except the PBOC), pulling liquidity from the system. Out of the last 13 FED tightening cycles, 10 ended up with a recession. Together with the recent commentary from BIS Quarterly Review, it seems we're in for a wild ride in 2019 with higher volatility and a bumpy road ahead.

Themes for the Week Ahead:

• Post-NFP positivity:  decent NFP numbers and inflation data might aid risk assets into the new back-to-school week.
• US/China trade talks: Friday's risk recovery was partially justified by hope of a positive outcome on Jan 7-8. If progress is made at the talks it will likely keep markets buoyant – while a step backward will be poorly received by investors.
• Fed Minutes:  traders will scrutinize these closely, attempting to understand Powell's new "flexible" stance.
• The US government partial shutdown is still under way. While the partial government shutdown isn’t a major concern for markets, signs that it may drag on indefinitely would have the potential to rattle already fragile investor sentiment.

Data in the Week Ahead:

• Bank of Canada Decision
• FOMC Minutes
• Carney Speech
• Powell Speech
• AUD Retail Sales
• UK GDP
• US CPI

On the Radar:
Going into the week we have some decent candidates: AUD & Cad strength vs. Eur and Usd. This will depend on risk appetite, which will be a volatile creature based on the commentary I've read thus far. We also have some strength in Silver going into this week.