Weekly Game Plan 16.7.18

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Here is this week's Game Plan:

There wasn’t any market moving news on the weekend, and with the FIFA World Cup final today (Sunday) there shouldn't be much focus on anything else until the week starts. 

Themes for the Week:

• US/China Trade Wars are always on trader's minds although participants have recently shown some resilience towards trade jitters. This may have to do with Evercore's Ed Hyman and Allianz's Mohamed El-Erian talking down trade war threats and forecasting the US will be better off in the end. The US/China trade war fear will likely recede further into the background unless the coming earnings season shows signs of tension: in the week ahead we get earnings from Bank of America, BlackRock, Netflix, Goldman Sachs, Johnson & Johnson. Morgan Stanley, Alcoa, eBay, IBM and Microsoft. 
• Also, China concerns are on the rise, as many analysts see the rising trade tensions between the US and China coinciding with a slowing Chinese economy. China Q2 GDP will be released on Monday along with monthly Retail Sales, IP and Urban Investment. 
• Fed Chair Powell gives testimony to US Congress in the week ahead after the Fed’s upbeat semi-annual report on Friday.  What will be of interest to the markets will be Powell’s comments on US trade policy and the potential of that policy to cloud the Fed’s upbeat outlook.
• Trump and Putin hold their first summit in Helsinki on Monday. This will be quite a match because both leaders like to play hardball.

Data in the week ahead:

• US retail sales are expected to increase strongly in June.
• China will release Q2 GDP figures.
• In the UK there will be updates on unemployment, earnings and consumer inflation. This will be influential for the BOE's August rate hike probabilities.
• Australia will release the labour force report on Thursday. RBA Minutes are also due.
• NZ Q2 CPI is expected to show the annual rate of inflation has lifted.
• The IMF will publish an update to its World Economic Outlook.
• Canada has Retail Sales & CPI out on Friday.

What's on the Radar:

I remain bullish on the Nasdaq going into earnings season; I remain bearish on commodities (Crude & Copper) which have proven to be most sensitive to the trade war jitters; I remain bearish on NZD vs. Aud & GBP; I'm bullish on GBP vs. Jpy, Nzd.


Good Luck!