News background & trading ideas for 14/03/2019

14 mars 2019

The international currency market` attention has been captured by Brexit and the pound, again. British lawmakers rejected a no-deal Brexit (voted by 312 to 308 to reject leaving the EU without a withdrawal agreement). Consequently, there will be a vote on delaying Brexit.

It is about lack of time for completing new agreement and holding another Brexit vote ( the UK is due to leave on March 29). So, it has to be delayed. They are likely to vote "for" it (it`s the only move they have.), although that should be agreed by the EU. So, the risk factor for the pound is present.

Nevertheless, the most likely scenario for the development of Brexit that it will be transferred and start the entire process all over again. Although the topic of Brexit is already pretty fed up nevertheless, this is an opportunity for further trading on the pound spikes. Recall, our position since September is to buy pounds on declines.

Another our long-time position is selling the Russian ruble. Therefore, we follow the news background and share the most interesting and significant news related to it. The other day, Bloomberg published an interesting study. According to Bloomberg Economics` Russian assets ($750 billion) moved abroad over the past 25 years. This is half the annual RFR budget of the Russian Federation or 3 (three) annual (!) Russian budgets. This fact is the best way to explain why we so persistently recommend selling the Russian ruble on the foreign exchange market.

Yesterday`s events. The US Economic data came out pretty mixed. Demand for durable goods have increased. Industrial inflation was slightly worse than expected. In general, we treat yesterday`s data as rather weak and continue to adhere to the idea of selling the dollar in the foreign exchange market.

The data on industrial production in the Eurozone pleasantly surprised (+ 1.4% m / m -1.1% y / y, when forecast was + 1.0% m / m -2.1% y / y). Taking into account the fact that the EURUSD pair has surely fixed above the 1.1300, today we recommend its selling.

Lastly, with regard to macroeconomic statistics, Thursday promises to be a relatively calm day, so our other positions have not changed: We buy oil and gold on the intraday basis. We sell USDCAD, but we buy USDJPY.