Weekly Game Plan 1 Jul 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.

Over the weekend China data was slightly lower than expected, but there was good news from the Trump/Xi front. The leaders agreed to call a temporary truce to the trade war: no further tariffs, more talks, and Trump will go easier on Huawei. Expect some risk-on (buying the rumour) into Monday. Also, Russia has agreed with Saudi Arabia to extend by six to nine months a deal with OPEC on reducing oil output. The news will likely take precence over the formal OPEC+ meeting that starts on Monday.
Finally, remember that the US will be closed on Thursday for Independence Day.

Themes for the Week: 

Central Bank Watch: the US-China trade truce might reduce the Fed's easing bias a tad. With bonds and gold pricing in bad news, we might see some respite (lower bonds, lower gold and higher USD). However, watch the ISM this week as traders will be quick to price in easing again if the PMI drops further. The NFP numbers will also play into FED expectations.
RBA: the market is expecting a cut on Tuesday and the data would justify it. This also means that any surprize reluctance to cut will result in a much higher AUD.

Data in the Week Ahead:

• CNY PMIs
• US ISM
• RBA decision
• UK PMI
• AU Retail Sales
• Cad Emloyment Report
• US Non-Farm Payrolls

On the Radar:

With the weekend news, I would expect risk-assets to receive a boost. I like Dax & SP500 longs; I like NZDJPY & CADJPY longs. I also like NZD strength vs. GBP & Eur weakness. USD will likely be exploited via news trades this week.

Weekly Game Plan 17 Jun 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:

We ended last week with big moves in FX: risk off (on worse China data and trade war jitters) and USD strength (on US Retail Sales). Over the weekend there was chatter from ECB that they "stand ready to act" if inflation does not rebound. This week is mainly about the FOMC meeting, with BOE and BOJ in the background.

Themes for the Week:

• FOMC: the market is pricing in a rate cut in July but Vanguard is already saying they have enough excuses to cut in June. In any case, expectations are for a FOMC rate cut. Hence, everyone and their dog is expecting dovish remarks from Powell this Wednesday. There is much room for a surprize if Powell does not deliver.
• US/China Trade War: the upcoming G20 summit on June 28/29 is quickly approaching and China has yet to confirm whether President Xi will meet Trump during the summit. No meeting would mean more tension and China appears to be preparing for a protracted trade war.
• ECB's Sintra Conference: two years ago Draghi used Sintra as a stage for forward guidance. Could it happen again this time round, given that it's his last Sintra Conference?
• In other markets, crure oil remains on watch after turbulent price action last week where it see-sawed between large inventory builds and shock attacks on tankers in the Gulf of Oman.
• In the UK, Conservative Party candidates to become the next Prime Minister will be whittled down in successive rounds of internal voting by MPs until just two remain at the end of the week. They will then begin their campaigns with the wider Conservative Party grassroots members, which will go on until late July.
• BOE and BOJ are expected to be non-events.

Data in the Week Ahead:

• FOMC, BOE, BOJ Rate Decisions & ECB Sintra Conference
• RBA Minutes
• UK CPI and Retail Sales
• CAD CPI and Retail Sales
• NZD GDP
• EU PMIs

On the Radar:

Evidently USD and JPY strength vs. Aud, Nzd, Gbp is at the top of the list. Things may change after FOMC but for the moment, those are the top picks in my book. For once, the clearest movers are in FX! No directional bets to point out in other markets as of yet.

Weekly Game Plan 3 Jun 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:

President Trump seems to act like a normal retail trader - emotionally, not logically. On Friday, Trump planned to place a 5% tariff on Mexican imports effective June 10 had this had a huge impact on markets. Comments made by Mexico’s President Obrador on Saturday might help to calm markets as he will take extra steps to curb migration. With bond markets pricing in a global slowdown and central bank easing, there will be keen focus on central banks in the week ahead. The RBA and ECB meet this week, while the Fed will be in focus with a speech by Fed Chair Powell

Themes for the Week:

• Obviously the tit-for-tat  trade jitters will be top of mind. Markets were expecting Trump to come to an agreement sooner or later, but instead the trade debate just seems to be getting worse. Next week there will be a G20 finance ministers' conference but who knows what will go down...
• Dovish RBA: the RBA is widely expected to cut rates by 0.25%. So that's priced in, and what will be more influential is the RBA's statement.
• Dovish ECB: the ECB will describe the details for another set of TLTRO lending operations at its meeting this week. The ECB will also release their economic forecasts which should help shape ECB expectations over the next few months. With worse data, and issues in Italy, the markets are pricing in dovishness all around. Watch out for surprizes.
• Italy vs. Brussels: Italy's Salvini is threatening to tear up EU fiscal rules. He argues the result gives his party a mandate to push through tax cuts and fight EU budget rules. The Rome-Brussels standoff will escalate after June 5 if the Commission decides to start disciplinary steps against Italy for failing to rein in debt.

Data in the Week Ahead:

• AU Retail Sales
• RBA Decision
• AU GDP
• US ISMs
• ECB Rates Decision
• CAD Employment
• US NFP

On the Radar:

So long as the markets remain risk-off, JPY and CHF will be in demand vs. GBP, Cad and USD. Also, equities should also remain under pressure with strong negative action across the board. Expect AU and EUR to remain rangebound until after the respective central bank meetings.