Weekly Game Plan 19 Nov 18

The only news from the weekend wasn’t on Brexit. The US/China trade dispute was still very much alive at the APEC summit on Saturday, suggesting little prospect of consensus. Watch risk assets, although the Trump/Xi meeting at the end of the month will be much more influential. The Pound will likely remain under pressure as PM May will have to face a confidence vote on Tuesday perhaps. At the time of writing, only 21/22 letters (of the 48 required in order to challenge PM May) have been officially noted so there really isn’t anything substantial yet.

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Themes for the Week:

  • Brexit Mess: PM May could face a no-confidence vote on Tuesday, and she also has to get her Brexit plan approved by Parliament. After key resignations last week, it seems difficult that she will succeed.
  • US/China trade jitters: the APEC summit did nothing to resolve the tension between the 2 parties. Will Trump be able to deescalate tensions with Xi at the G20? His comments certainly suggest it’s possible, and have recently aided risk assets (EM & global equities, base metals, Aud & Nzd).
  • Crude Oil: we all know that Crude Oil is a key component of inflation expectations, so it wouldn’t be a surprize if the recent dovish talk from Fed speakers was due the big drop in Crude. We’ll see just how far this goes. For now it remains on everyone’s radar.

Data in the Week Ahead:

  • UK inflation report hearings
  • RBA Minutes
  • OPEC Meeting
  • ECB Minutes
  • CAD CPI & Retail Sales

On the Radar:

GBP remains volatile and I only suggest touching it if you’re plugged into a news squawk all day long. Any rogue comment can spur intraday volatility in either direction. It’s potentially simpler to get aboard the US/China theme via AUD or NZD vs USD or Euro…and yes for the temerary GbpAud and GbpNzd are the intraday vehicles of choice. Crude Oil remains a sell if we can breach 56.00 once again.

About the Author

Justin is a Forex trader and Coach. He is co-owner of www.fxrenew.com, a provider of Forex signals from ex-bank and hedge fund traders (get a free trial), or get FREE access to the Advanced Forex Course for Smart Traders. If you like his writing you can subscribe to the newsletter for free.

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