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Trading Week Ahead: 20th-24th January 2020

jeffriess
January 19, 2020
by Joseph Jeffriess, Market Analyst

Article Recap

Key Events This Week


Tuesday (US Bank Holiday)
JPY BOJ Outlook Repo
Monetary Policy Statement
Day 1 WEF Annual Meetings
GBP Average Earnings Index
EUR German ZEW Economic Sentiment

Wednesday
Day 2 WEF Annual Meetings

Thursday
CAD CP
BOC Monetary Policy Report
BOC Rate Statement
Overnight Rate
BOC Press Conference
AUD Employment Change
Unemployment Rate
EUR Main Refinancing Rate
Monetary Policy Statement
ECB Press Conference

Friday
NZD CPI
EUR French Flash Services PM
German Flash Manufacturing PMI
German Flash Services PMI
ECB President Lagarde Speaks
GBP Flash Manufacturing PMI, Flash Services PMI

Saturday
CAD Core Retail Sales
USD Flash Manufacturing PMI

What is the World Economic Forum Annual Meeting?

The World Economic Forum will be held in Davos-Klosters this week running over two days. It convenes world leaders to discuss the global, regional and industry agendas at the beginning of each year. The World Economic Forum’s mission is to improve the state of the world, which has driven the design and development of the Annual Meeting objectives. – SDG

How does the trade deal impact the future of the U.S.? 

With the trade deal signed last week, commentators have been looking at how this deal will shape U.S. future GDP.  Some see growth, and others see no change. One thing most agree on is that the U.S. won this phase.

U.S. markets start the week with a bank holiday with most banks observing Martin Luther King Day. Despite the quiet start to the week, the impeachment process will be in full swing. We will be seeing a vote sometime during the day on Jan 21, this will be around Senate majority leader Mitch McConnell’s proposed rules governing the first phases of the trial. This opens the options of voting later on whether witnesses would testify and new evidence could be introduced, prompting Senate Democratic Leader Chuck Schumer to demand votes on approving witness testimony, rather than leaving that question open until a later date in the trial. Republicans would also be able to seek to call witnesses of their own. The White House commented last Thursday saying that it didn’t think witnesses would be necessary. Impeachment has done little to influence stocks or the USD in recent times, so unless we see a very negative or positive development we would think this will remain the case this week. U.S. indexes continued their bull run last with new records hit on multiple times during the week. With no real key U.S. data is due this week, traders will continue to look at the ins and out of the current trade deal, attention will also continue to move towards trade deal phase 2.

US30 weekly

US30 Weekly

A busy week for the EUR 

We have a busy week coming up for the EUR in regards to data and ECB input. The ECB is meeting late Thursday and is expected to hold rates at 0.00%. Talk has been emerging around going back to negative rates; this emerged after last week’s ECB Monetary Policy Meeting Accounts. With a new head at the ECB, will we hear something new in the Statement from Christine Lagarde? Traders will be looking for hints in the statement and press conference. Friday is another to watch with key PMI data coming out from France and Germany. Confidence in the current state of Germany’s economy is far from concrete and this overshadows the EU. Further weak data could continue to fuel negative rate speculation and in turn, hurt the EUR. The weekly EURUSD remains trapped in ascending triangle price pattern, as its located at the end of a downtrend, we’re not rushing in to say that it’s a continuation consolidation pattern just yet. Buyers will have to prove this one with a breakout confirming the current developing uptrend is going to continue.

EURUSD Weekly

EURUSD Weekly

Good trading from Eightcap.
All times are AEDT.