You can always find my weekly analysis in the FXRENEW Blog each week, along with articles and thought leadership pieces. My new Coaching Page is also online.
Here is this week's Game Plan:
There was no news out over the weekend, but this week will be a busy one. Late Friday, Merkel and Xi Jinping discussed overcapacity in world steel markets and agreed to work on solutions, emphasised close ties between the two countries, both facing planned US steel and aluminium tariffs. The Merkel-Xi call came amid tensions between the United States, Europe and China over US. tariffs, and China's rejection of US legislation encouraging an exchange of officials between the United States and Taiwan.
Trade issues aside – it is the FOMC decision on Wednesday that will be the main event in the week ahead and we will be holding a Webinar on it. While a Fed hike is nearly 100% discounted, the market will watch the Fed’s economic forecasts, the “dot plots” and the press conference by Powell. The Bank of England and RBNZ also meet in the week ahead, but there is no change expected from either central bank. The RBNZ meeting may get some attention, as it will be the first meeting for new RBNZ Governor Orr. The BOE is expected to remain on hold, but the market will look for guidance on what is on store for future meetings.
The UK/EU Summit on Thursday/Friday will also be a focus for the FX market, with the usual hopes of the UK negotiations making headway.
Datawise, the only prints will be UK CPI, UK Retail Sales and UK employment plus AU employment data.
As of Friday's close, the FX market positioned for risk aversion with Aud & Cad weakening vs. Jpy & USD. GBP is also holding up. FX might be positioning for a trade war, whereas other markets are fairly steady. What will emerge we do not yet know, but going into the week I will still be looking for AUD & Cad weakness vs. USD/JPY/GBP. Crude might be worth watching as well (to the topside).
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