News background & trading ideas for 14/02/2019

14 Şub 2019

Yesterday was quite rich from macroeconomic statistics. Europe, as already usual, disappointed. Industrial production in December decreased by 0.9%, that is, it turned out to be more than 2 (!) times worse than forecasts (analysts expected a decrease of only 0.4%). In general, if we match it with the data of last year, the drop was the maximum since 2009 (!). So the data is very frustrating. Although the euro has not undergone massive sales in the foreign exchange market. That's what it means, have taught the markets to weak data.

The UK has taught traders to mediocre statistics in recent years. Yesterday's inflation data for the first time in 2 years were below the target of the Bank of England (in annual terms, inflation was 1.8%). And in January a deflation of at all -0.8% m/m was recorded. If it is not the Brexit, we could speculate on the possible reaction of the Bank of England to such statistics. But it makes no sense since everything in the Kingdom now revolves around the exit of Britain from the EU and precisely the outcome of this process will determine both the state of the economy and the monetary policy in the future.
Yesterday was a clear example. Another portion of rumors about the rescheduling of Brexit terms led to the short-term pound’s growth. But it is still rumors. Nevertheless, our position is unchanged - we continue keeping mid-term purchases of the pound and buy it from the attractive points within a day.
And last but not least, the US inflation has already exceeded forecasts in the annual value, but there was no much flow of optimism among the dollar buyers. After all, for the Fed the general economic state is much more interesting, than the inflation component. Optimism was most likely affected by Trump's allegations about the postponement of the implementation of tariffs against China for 60 days, since the negotiations are dragging and have every chance of success, and it looks like the shutdown will have to be canceled. So, the dollar increase yesterday is utterly natural. Our position, meantime, is maintained - we believe that the dollar is relatively overvalued and it has to be sold.

Today, in terms of statistics, will be quieter, but Eurozone GDP data should still be monitored. Well, the focus should be on the figures for retail sales in the United States. We would not be surprised if, instead of a positive zone, they turn out to be less than 0. The dollar is likely to be subject of sales in this case. But once again, we note that it is better to act upon, that is, to enter the transaction after the publication of data.

Since there were no fundamental movements yesterday, the trading plan is unchanged.

If the USDCAD pair decides to go up to 1.33, sell it from there. Stops are above 1.3350. Profits are 1,3200.

Buy gold below 1310, adding about 1295. The minimum profits are set in 1320, and the stops are placed below 1290. As long as the asset is above 1294, we see no threat for long positions.

EURUSD: purchases from 1.1260. Stops are below 1.1230. Profit in the area of 1.1420.

Well, as already traditional, we recall about the feasibility of selling the Russian ruble, especially in the light of the intensification of talks about a new portion of sanctions from the US and the EU against Russia, which also promise to be the toughest ever. According to Reuters, new issues of OFZ, the banking and energy sector of the Russian Federation, as well as a number of individuals can get dragged into new sanctions.