Weekly Game Plan 2 Dec 19

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Here is this week's Game Plan:

We enter quite a busy week with central bank meetings, NFP and other data coming up above and beyond the usual US/China trade war and the upcoming UK Elections. GBP was the strongest mover last week on the YouGov polls putting Johnson in the lead with a strong advantage, which diminishes uncertainty and points to a clear Brexit resolution.  Risk appetite remained strong last week with stocks hitting new highs and Jpy weakening.

Over the weekend China official manufacturing PM posted 50.2, back into expansion for the first time since April this year. Hence, risk appetite may continue into the week although we still have to see the Caixin PMI early Monday.

Themes for the Week Ahead:

• CRUDE OIL: December 5th will be a big day for oil markets. OPEC gathers for a policy meeting and the same day, OPEC's biggest producer Saudi Arabia will give the final pricing for the IPO of state oil firm Aramco. The IPO will be the elephant in the OPEC meeting room because the oil price at the time will be key to the listing, expected in mid-December.
• US/China Trade War: headlines on the trade war will continue to dictate risk appetite, as the December 15th tariff-deadline approaches, and Trump has allowed the Hong Kong bill to pass. Markets thus far are discounting no additional tariffs and no intervention in Hong Kong...but with Trump anything can happen.
• Central Banks: neither the RBA nor the BOC are expected to cut rates this week, so guidance will be key.
• NFP-Friday: as usual the Payroll data will garner attention. As the GM strike is over, there may be a natural rebound this month in the headline.

Data in the Week Ahead:

• Caixin PMI
• ECB's Lagarde (Monday)
• US ISM Numbers (Mon, Wed)
• RBA Decision
• AU GDP
• Bank of Canada Decision
• AU Retail Sales
• OPEC
• Cad Employment Change
• US NFP

On the Radar:

Going into the week I remain bullish on US equities, bullish on GBPJPY and GBPAUD and I will be watching Crude Oil post-OPEC.