Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Trade Talks, Shutdown And Brexit Eyed This Week

Published 11/02/2019, 06:46
Updated 05/03/2019, 12:15
  • Markets
  • UK
  • US/China trade talks
  • USD and Gold
  • Oil

UK data and Brexit eyed, while US team heads to Beijing for more talks

It promises to be another very interesting week for investors, with the US, China and UK very much at the centre of most of the headlines sending ripples through the markets.

In the UK, we’ll be bouncing back and forth between Brexit and the economy, as we get an almost daily update on the economy. That starts with GDP data this morning, which is expected to show the economy flatlined in December but grew slightly across the whole quarter. In a week in which Germany could follow Italy into technical recession, this suddenly doesn’t seem quite so bad.

Trade talks between the two largest economies continue to be the primary focus for investors, with the narrative around the success of them appearing to change week by week. The prospects for a deal now look very slim, with the best case scenario now looking like an extension of the deadline and a commitment to no more tariffs during that period. Of course, assuming anything when Trump is involved isn’t wise and, well you know the rest.

Robert Lighthizer and Steve Mnuchin have been tasked with heading to Beijing this week to work on the differences and try and rescue a deal, with the 90 day deadline fast approaching. Traders will continue to closely monitor the progress with the dollar being well backed as talks appear to falter, much in the same way that it did during the initial escalation phase.

Gold remains above $1,300 after first test of key support

The rebound in the dollar, following a period of weakness since mid-December, has taken some of the shine off gold. Not much has changed in terms of the key levels here. We continue to see it flirting with $1,300 from above and came within a whisker of testing it last week. As long as this holds, it continues to look bullish, even if the dollar remains a major headwind.

Gold Daily Chart

OPEC monthly report eyed as prices remain pressured

Oil is also feeling the weight of a stronger dollar dragging on price, with both WTI and Brent coming off their highs and further delaying a very bullish technical break to the upside. Of course, there are other factors contributing to the declines we’ve seen including record US output and questions over Russia’s compliance with the deal but together all of these are weighing.

The OPEC monthly report will be one to look out for on Tuesday and should give us much better insight into how the group and its allies are complying with the output agreement. With there being so many doubts over global growth this year, it will also be interesting to see what impact this has on the cartel’s assessment of demand growth and whether that will exacerbate the oversupply issue.

Disclaimer: This article is for general information purposes only. It is not investment advice, an inducement to trade, or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. Ensure you fully understand all of the risks involved and seek independent advice if necessary. Losses can exceed investment.​

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.