News background and trading ideas for 29/11/2018

29 de nov. de 2018

Yesterday, in the financial markets (apart from the cryptocurrency market), until the speech of the Fed Chairman Jerome Powell was considerably quiet. In many ways, this was due to the absence of surprises in the information field. By and large, the current positional struggle continued. Data on US GDP for the third quarter (revised) came out exactly with the expectations of analysts and amounted to 3.5%. In general, this indicator is excellent, but it has been included in the price of the dollar long ago, so no one hastened to buy it.

The major event for the dollar yesterday was the speech of the Fed Chairman Jerome Powell. We’ve noted many times already, that the markets are interested a lot of future Fed’s actions now. The thing is that the cycle of rate hikes is certainly coming to an end and everybody is interesting how much of these increases are still. Actually, the less of raises, in theory, then worse for the dollar. Powell noted that the rates are already very close to the neutral level. That, in fact, confirms that the Fed has achieved the desired point. Considering the exceedance of the neutral level of the rate should be proved, and if the US economy begins giving hints of a slowdown, it's undoubtedly that the Fed will go over the neutral level of rates.

Generally, the attitude against the dollar in the foreseeable future, in our opinion, may change. The reason is that the impetus that Trump gave to the US economy, including fiscal easing, may well fade away and the US economy will return to growth rates of around 2%. Of course, for now, these are only concerns, but they are already beginning to put pressure on the dollar. Analysts at JPMorgan Asset Management recently released a report saying that the dollar exchange rate is expected to decline in the future in 2019, and this trend can last for years.

Recall, we are generally inclined to think that the dollar is at the top now. In this regard, we recommend its neat (after all, transactions against the current trend) sales. Accordingly, our recommendations for working in the foreign exchange market this week: sales of USDJPY and USDCAD, as well as purchases of EURUSD and GBPUSD.

The last pair in this list has its own history instead. The drama with Brexit is close to completion. There is less and less time until the vote in Parliament. Bloomberg on this occasion conducted a survey of experts on the outcome of the vote. 55% of respondents believe that parliamentarians will not approve the current agreement. In our opinion, even if the first vote crashes, this will not be the end of the story. And on the second or third overvote, the fancied result will be accomplished.
Basis - the price of the issue is too high. Failure of a vote is an exit without an agreement. But it is profitless for Great Britain itself and very unprofitable for the irrational principle to take over the rational one. In this light, yesterday’s statements by the head of the Bank of England Mark Carney are very revealing. He said that exit without a deal would cause vast destruction to the UK economy. In particular, the country, in this case, expects the toughest economic recession since the Second World War.

Yesterday the Russian ruble predictably fell. But this was not the limit of his fall. So we continue to look for points for its sales. This is perhaps the surest deal in the foreign exchange market today.

Regarding the oil market, here, the growth of the US oil inventories has killed just grown optimism of oil buyers. Our position is unchanged - midterm sales of the oil.

Gold yesterday has perfectly worked out our forecast. Considering that it purchases look well balanced to the risks, we continue looking for points for gold intraday purchases.