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Trading Week Ahead: 9th-13th December 2019

jeffriess
December 8, 2019
by Joseph Jeffriess, Market Analyst

Article Recap

Key Events This Week

Tuesday
RBA Governor Lowe Speaks
UK GDP data

Wednesday
Chinese New Loans Data

Thursday
US CPI Core CPI data
FOMC Economic Projections, Press Conference and Statement
Federal Funds Rate
SNB Monetary Policy Assessment and Policy Rate
ECB Main Refinancing Rate and Monetary Policy Statement
UK Parliamentary Elections (All Day)

Friday
ECB Press Conference
BOC Governor Poloz Speaks

Saturday
US Retail Sale and Core Retail Sales data

Interest Rates

An FOMC meeting will be held early Thursday morning where the Fed is expected to hold rates at 1.75%, with this likely to be maintained until after the United States presidential election in 2020, ignoring pressure from President Trump for further cuts. A resilient labour market is certainly helping both parties to keep patient. Traders will of course be looking closely at both the statement and projections for future direction clues, but the general view is to hold through the forecast horizon with little change to growth seen.

The ECB and SNB rates decisions are due this week with markets expecting holds at the current rates. As we have a new ECB president, will we see anything new in the monetary policy statement?

US-China Trade War

Late next week on Sunday 15th, the next round of tariffs are scheduled to come online with $156 billion worth of goods likely affected. These latest tariffs could potentially be the most damaging since they directly target consumer goods. The markets had been hoping for a signing of the phase-one trade deal by that date, and it could still happen with time still on hand – but if the United States and China fail to sign and tariffs come online, could we be in for a new round of heavy-selling in stocks and a jump back into the JPY and Gold?

Britain Goes to the Polls

The UK General Election will be held on Thursday, and as we’ve seen from the market activity last week a Conservative win looks great for the GBP and what translates into stability. This is from a market point of view as risk currencies like the GBP normally fall on uncertainty or fear. Look out for a special report on the election on Tuesday, with our thoughts on how it may impact the GBP/USD, EUR/GBP and FTSE depending on the outcome.

Chart to Watch

Can the good times continue for those with an appetite for risk currencies? Last week we saw some solid moves away from the safe havens of the USD and JPY as GBP, EUR and AUD recorded good gains. Here, we’re going to focus on the EUR/USD weekly chart (below) as it has formed a new Higher Low which could be the first step in a new leg higher. Traders will need to watch the FOMC, ECB and UK general election as they are shaping up as key influences that could make or break the current pattern.

EURUSD.iWeekly

Good trading from Eightcap.
All times are AEDT.