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.