Weekly Game Plan 29 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:

It should be a quiet start when the markets open tonight, unless the weak China data released over the weekend weighs on sentiment. This week is full of data, but outside of the data-driven boosts I wouldn’t bet on much movement as we face month end and the summer doldrums. Moves are likely to be concentrated around FOMC and NFP. We enter the week on the back of a better GDP report/stronger USD, and stronger equities after decent earnings.

Themes for the Week:

• FOMC: this will be the main focus. Consensus is for a 0.25% cut and a dovish statement and presser. If we do get relatively benign US data plus an accomodative FOMC, expect the risk rally in equities to continue.
• Earnings: we will get results from 164 firms listed on the S&P500. Breadth deepens and some of the names will include Apple, Merck and Pfizer.
• BOJ is expected to be a non-event, with no changes expected (not that the previous stimumus did anything to help the Japanese economy…).
• BOE: no change is expected but the meeting will be watched for policymakers’ assessment of the British economy’s current downturn, and how they might respond should the UK exit the EU without a transition deal under Boris Johnson.
• US/China Trade War: U.S. and Chinese chief trade negotiators will lock horns on Tuesday in Shanghai in what will officially be their 12th round of meetings.

Data in the Week Ahead:

• BOJ Decision
• US PCE
• CNY PMIs
• AU CPI
• EUR CPI
• CAD GDP
• FOMC Decision
• BOE Decision
• US ISM
• AU Retail Sales
• US Non-Farm Payrolls

On the Radar:

Volatility in FX has been dropping further, and that does not inspire much action outside of data-driven moves. With that said, there have been directional closes last week and the best looking candidates for continuation are AUD,GBP,NZD (weakness) vs. USD & CAD (strength). Equity performance will hinge on earnings and the SP looks like the main candidate for longs.

Weekly Game Plan 22 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:

There wasn’t any fresh news on the weekend, but the escalation of tensions between Iran and the west following the seizure of a British flagged tanker may start to weigh on risk assets and encourage some safe-haven flows. Crude Oil has been falling o sour global growth outlook but escalating tensions should start to affect prices sooner or later. Key events this week will be the ECB decision, US GDP and the UK leadership contest.

Themes for the Week:

• US Q1 GDP will be the main event this week and will shape market expectations ahead of the FOMC decision next week. Remember that the market is pricing in a 0.25% cut after Fed's Williams' speech.
• The ECB meeting will also be a key event. ECB expectations have turned extremely dovish over the past few weeks with banks starting to price in rate cuts and the return to bond buying sometime this year. It will be tough for the ECB to meet these expectations but we shall see.
• Watch the Pound between Tuesday and Wednesday: Boris Johnson is expected to get the PM job and the market is watching to see if he softens his stance regarding negotiating with the EU on a Brexit plan if he gets the job. If he remains steadfast committed to a no-deal Brexit, GBP should continue it's descent.
• Earnings: Netflix kicked off earnings for FAANG stocks on a bleak note. Of course it doesn't mean shares of Facebook, Amazon and Alphabet will do the same but it's a worry. Markets will be watching closely.
• Summer Doldrums: as we approach August, expect less volatility in FX outside of major news releases.

Data in the Week Ahead:

• EUR PMIs (expectations are dovish)
• ECB Rates Decision (Expectations are dovish)
• US GDP (Expectations are dovish)

On the Radar:

Going into the week, the more decisive signals seems to be on equities with Nasdaq or SP500 shorts, Dax shorts and perhaps Gold longs still (gold has been a great trading vehicle of late with it's volatility).  There isn't much to write home about in FX. Some weakness in the Euro and strength in CHF is all that seemed evident into Friday's close. But the Euro's fate will be decided by the ECB this week.

Weekly Game Plan 15 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:

Growth issues remain at top of mind with central banks easing and PMIs slowing down across the globe. Risk assets remain bid on Central bank support and a lower US dollar. After a dull weekend, we will have a busy week with US company earnings in focus alongside central bank guidance and decisive event risk. The USD should remain offered ahead of the July 31 FOMC meeting, and UsdJpy (short) will come into focus if/when the growth issues start to affect risk assets.

Themes for the Week Ahead:

• Data dependancy: a plethora of data is due in the week ahead and it all comes back to growth concerns and inflation. Are central banks correct in their cautious stance or not?
• Earnings: Fifty-seven S&P500 firms release earnings over the coming week. It’s not expected to be a robust season, with the consensus estimate for a 2% year-ago drop in earnings. Among the key names are Citigroup, JP Morgan, Goldman Sachs, Wells Fargo, Bank of America, Morgan Stanley, eBay, Netflix, Microsoft, BlackRock, United and Amex.  With valuations stretched and lingering worries about the economic impact of protracted U.S.-China trade tensions, disappointing results could pour cold water on the rally.
• Tariff Threats: last week French lawmakers approved a tax on big tech companies, potentially creating more tension on the trade front. Trump has ordered an investigation into the French tech tax plans, a probe that could lead to the U.S. imposing new tariffs or other trade restrictions. The trade war continues and Europe has entered the battle field it seems...

Data in the Week ahead:

• China GDP
• NZD CPI (should be better)
• RBA Minutes (could be dovish)
• UK Employment change (tough call)
• Ger ZEW (tough call)
• US Retail Sales (could be lower)
• Powell Speech
• UK CPI (tough call)
• CAD CPI (could be lower)
• AU Employment Change (could be lower)
• UK Retail Sales (could be lower)
• CAD Retail Sales (could be higher)

On the Radar:

Dow (longs), Crude (longs), UsdCad shorts, EurCad shorts, NzdUsd longs, EurNzd shorts, perhaps EurJpy shorts.