Weekly Game Plan 1 Apr 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:

Back after a short break.

Friday ended with a risk-on tone, and China PMI data released today came in surprisingly strong. This could calm global growth fears that raged at the start of last week when global bond yields plunged, and push Indices, Aud & Nzd higher into the start of the week unless...Erdogan loses significant support in local elections and goes off the deep end.

Themes for the Week:

• BREXIT: after the 3rd loss on Friday, UK PM May is facing a new push by members of her Conservative Party to exit the EU sooner rather than later, even with a no-deal Brexit. On Monday, lawmakers will try to agree on an alternative to May's Brexit plan. The deadline is April 11th: without any clarity until then, the choice will be between May's deal or No-Deal with no time left to do anything else. May will resign on May 22nd in any case.
• US/China issues: talks between the US and China continue and the market will closely monitor comments from both sides of the table.
• RBA to join the doves? The RBA is widely expected to emphasize the downside risks, while not clearly shifting to a dovish bias.
• Yield Curve Inversions: the inverted US yield curve has analysts now expecting Fed rate cuts, but the US is by no means the only country with a yield curve inversion. The global slowdown is hitting many G10 countries and in the US in particular is creating a shortage of short-term T-Bills as worldwide investors seek the safety of the world's reserve currency within short-term maturities. The markets wil be tense still, and will react strongly to any miss in US and EU data.
• Turkey Elections: voters in Turkey are electing mayors for 30 large cities, and a main battleground for President Erdogan's party appears to be in the capital, Ankara. Opinion polls suggested the candidate of an opposition alliance, Mansur Yavas, could end the longtime rule of Erdogan's Justice and Development Party in Ankara. Another closely watched mayoral election is in Istanbul. Erdogan himself has said at campaign rallies that "whoever wins Istanbul, wins Turkey." I do suspect that the anti-establishment parties will win, but Erdogan will not accept the results and create more chaos, which might impact EM.

Data in the Week Ahead:

• China Caixing PMI
• US Retail Sales
• RBA Decision
• AU Retail Sales
• CAD Employment Change
• US NFP

On the Radar:

The best trending action still looks like it's in Indices (Dow, going up) and Bonds. Gilts and Bunds look like they want to push higher this week, although the moves in Gilts especially will be driven by Brexit headlines. The same goes for GBPCAD which is a decent short candidate technically speaking.  Beyond GBP, I like the odds of further EUR weakness vs. CAD and USD. NZDCAD is also sending a decent bearish signal, and this CAD strength is driven by Crude advancing into last week's close but also by speculation the employment report will remain strong this week.

Weekly Game Plan 18 Mar 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:

Over the weekend, UK PM May made progress towards getting her deal approved. The Democratic Unionist Party (DUP) is close to changing its position for the first time after receiving a promise that the government would put into law a requirement that there be no divergence between Northern Ireland and Britain. It's still all up in the air, but the chances are roughly even now between May's  deal (finally) being accepted, and a No-Deal Brexit. GBP may get a lift into the week on this news.

Themes for the Week ahead:

• Brexit will continue to dominate headlines as reported above.
• Beyond that, the FOMC will be the next most important driver, with no change in rates or statement. Traders will instead watch the economic projections and dot plot along with any update on when and how much the Fed will reduce its balance sheet. The markets are expecting more of the same cautious/dovish tone, so the USD could pop on any neutral or balanced surprize.
• The Bank of England also meets this week and they too are expected to remain on hold. All UK data will probably be overshadowed by Brexit talks.
• US/China trade wars will also remain on the radar.  Positive news was reported on Friday however.

Data in the Week Ahead:

• RBA minutes
• UK employment change
• UK CPI
• NZ GDP
• AU Employment Change
• UK Retail Sales
• CAD Retail Sales
• CAD CPI

On the Radar:

As of Friday's close, the clearest opportunities remain outside of FX: US equities (long), Dax (Long), Crude Oil (long). In FX, the only thing in play is GBP but if you do dare touch it, trade small and go for intraday targets given the wild swings that can happen. EurGbp shorts and GbpUsd longs seem like the best of the pack.

Weekly Game Plan 11.3.19

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:

Remember that the US and Canada have shifted to DST already.

There wasn’t any market moving news on the weekend so it should be a quiet start to the trading week and we should pick up where we left off on Friday with rising fears over the state of global growth following very weak China trade data and a huge miss in the headline US jobs number. Adding to investor angst were reports indicating the US and China were not yet close enough to agreeing on a trade deal to schedule a meeting between US President Trump and China President Xi.  However, the move on NFP may be overdone since AHE were better than expected and the unemployment rate also improved.

Themes for the Week:

• Global growth concerns have crowded out central bank expectations as the main factor impacting markets. ECB, Bank of Canada and RBA have shifted the trends in their currencies and selling rallies should be the way to go for now.
• Brexit: Barnier's latest attempt to "offer concessions" is old wine in a new bottle and as such will be refused.  The UK Parliament will vote Tuesday on UK PM May’s latest draft deal with the EU. If the deal is rejected again there will be another vote on Wednesday for a ‘no deal’. If the no deal proposal is rejected as expected, there will likely be yet another vote the next day (Thursday) on delaying the March 29 deadline. If nothing comes of the votes, there will be a deadlock. I still think that either the Malthouse deal OR a no-deal Brexit are the only real contenders.
• Risk appetite turned sour into the close as various reports suggested that a meeting between Trump and Xi wasn’t set in stone and there were still gaps to be filled before a meeting can take place. The trade war sentiment will still drive markets in the week ahead.
• The Bank of Japan meets this week and they aren’t expected to change policy. Of interest will be the statement and whether Kuroda follows the dovish tilt that other central banks have shown recently.
• Emerging Market stress: with the rally in the USD, emerging market fx like ARS, TRY AND ZAR have taken a beating. This may also weigh on risk sentiment in the coming week as funds that face further losses in EM space will be forced to liquidate profitable holdings elsewhere.

Data in the Week ahead:

• US Retail Sales
• Powell Speeches
• UK GDP
• US CPI
• BOJ Decision
• China Industrial Production

On the Radar:

The USD remains the leader in FX space and as such I like the odds of EurUsd, GbpUsd shorts and UsdCad longs. The caveat is that the Brexit votes will impact GBP and my stance could change depending on the outcome. EurJpy shorts may be considered also, if risk sentiment continues to deteriorate. Technically speaking, the Dow hasn't done anything particularily bearish just yet, so it will take more negative news to keep the pressure on.

Weekly Game Plan 4.3.19

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:

Last week closed with optimism on some sort of US/China agreement, disappointing US data taking the edge off some of the risk assets and an acceleration of the move higher in US yields. This week might start off with a bang if the market gives any weight to Trump’s complaints (saturday) over the strong US dollar and some further criticism of the Fed's balance sheet reduction. Beyond Trump, it will be a busy week.

Themes for the Week:

• Brexit: UK PM May is now attempting to delay Brexit by a few months and the week of March 11 sees a few meaningful votes in that sense. At the same time, Corbyn is now in favour of another referendum. The irony of all this: the EU is simply not participating or negotiating. GBP has been rising on speculation that "no-deal" is definitely ruled out. For now, trade the rumour but beware that it's not over yet. CBI's chief economist stated recently "More and more companies are hitting the brakes on investment and day-to-day business decisions are becoming increasingly problematic".
• China: China's parliament kicks off its annual meeting on March 5 and the market is looking forward to tax cuts alongside laws banning forced technology transfer and government "interference" in foreign business practices. China is becoming an influential global player so we will need to track their data and developments more and more going forward.
• ECB: the market is expecting the ECB to unravel some kind of stimulus at this meeting (mar 7) in the form of fresh Targeted Long-Term Refinancing Operation (TLTRO) that provides loans to banks for a fixed period at low cost in order to stimulate lending within the Eurozone.  A second consideration will be whether the ECB signals a delayed hike. However, the ECB could well do any combination of delaying hike guidance, announcing intention to introduce a TLTRO III, or announcing details of a TLTRO III. It could also do none of these steps versus simply jawboning markets that it is prepared to do so.
• NFP: the market will look carefully at this report. Headline jobs' numbers have been good recently, but the FED seems more interested in the Average Hourly Earnings and recently spoke about "muted" inflation pressures. Rising pay shows no sign of translating into price increases.

Data in the week ahead:

• RBA Decision & Lowe speech
• AU GDP
• BOC Rates Decision
• AU Retail Sales
• ECB Rates Decision
• CAD Employment Data
• US NFP

On the Radar:

USD strength into last week's close has impacted all asset classes. I like Silver shorts this week, and there may be a place for Crude Oil shorts if the negative momentum continues. In terms of risk appetite, the Dow closed out neutral last week, with a tight range. I will be looking to play breaks either way. In FX, GBP closed out the week rather strong, so GBPAUD and GBPCAD look interesting. But also AudUsd (short) and UsdCad (long). Nzd is also showing weakness but Aud seems weaker ahead of the RBA.