Weekly Game Plan 25 Nov 19

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Here is this week's Game Plan:

Last week was a cautious one, with risk assets generally finishing the week lower. Despite kind words from Trump and Xi, the relations between the US and China are still not clear: arguments over human rights, Hong Kong and U.S. support for Chinese-claimed Taiwan continue to drag on, and over the weekend Chinese State Councillor Wang Yi added gas to the fire saying that the US is the strongest source of instability!  However, sources reported China will raise penalties for violations of intellectual property rights and look into lowering the threshold for those who steal IP, according to new government guidelines released Sunday.

Themes for the Week Ahead:

• It’s almost all about the US/China Trade Debate: as a Dec. 15 deadline for U.S. tariff hikes approaches, Beijing has reportedly invited top U.S. negotiators to talks. But it might call those off if President Trump signs into law a bill supporting Hong Kong’s pro-democracy protesters or if U.S. warships keep sailing near islands it claims in the South China Sea.
• HK Elections: this election is for District Council positions that wield little power or influence. The significance of the election lies in the context of recent protests against China’s incursions into Hong Kong’s administration. There has been a record turnout (63%).

Data in the Week Ahead:

• GER IFO
• NZD Retail Sales Q/Q
• RBA Lowe Speech
• RBNZ Financial Stability Report
• RBNZ Orr Speech
• US GDP Q/Q
• CAD GDP

On the Radar:

Once again this week everything will hinge on US/China news output. Equities closed the week rather neutral, but especially US equities have attempted to forme a base and so I am not bearish just yet. Aud, Cad and Euro weakness vs. USD and (trade war depending) vs Jpy seem like the clearest bets in FX space. But keep your eyes on the wires again.