NFP, May asks EU for Brexit delay, and The USA oil production

Bureau of Labor Statistics reported employment data on Friday. Data on NFP pleasantly surprised “fans” of the dollar. With market expectations + 177K, in fact, came out + 196K. After the failure of the previous data, the level of fear that the US labor market is experiencing serious problems has subsided. But the mood was spoiled by data on the average hourly wage, which grew by only 0.1% (analysts had expected growth of 0.3%). In general, the data can be interpreted as positive for the dollar, but its growth was moderate. This suggests that its growth potential is limited. In this regard, this week we are looking for points for selling dollar.

We give the current summary of Brexit. Theresa May officially requested the EU to postpone until June 30 in order to negotiate with the opposition and create a version of the agreement for which the Parliament will vote. However, it remains to be seen whether the EU will provide this delay or not. Last month, the EU has already refused to provide it until June 30 and may well “resist”, citing the need for a longer delay. So everything remains unclear and tense. More clarity on the idea will be April 10, when the EU will convene an emergency summit on Brexit. EU leaders will meet April 10 at an emergency summit this will clarify the Brexit situation.

Recall the United Kingdom should either leave the EU without a deal or agree on a new postponement on Friday. The pound is under pressure. We continue to believe in the common sense of both parties and that the UK will not come out with no deal. Therefore, our trading tactics are unchanged - we buy a pound on descent.

Trade negotiations between the US and China are still in progress, and the parties continue to radiate optimism.

A few words about the oil market. Last week we already noted that the data of the US Department of Energy recorded the fact of a new absolute record of oil production in the USA - 12.2 million barrels. So on Friday, data from Baker Hughes was published, which showed that the number of oil rigs in the United States increased by 19 units. Signals are definitely bearish for the oil market. The sharp drop in oil production in Venezuela and the effect of OPEC + No. 2 offset production growth in the United States so far, and events in Libya only add optimism to oil buyers. But the situation, in our opinion, is becoming increasingly dangerous from the point of view of oil prospects. So, we still continue to look for points for buying on the intraday basis, but with a much lower level of aggression at the same time we are beginning to gradually prepare for correction, as well as open medium-term positions for sale. OPEC + No. 2 will soon expire and if it is not renewed, the massacre will begin on the oil market.

The EU will probably be the main news generator. The meeting of the European Central Bank on Wednesday and the EU decision to postpone for
the UK will be the main events of the week. Pay attention to the text of the minutes of the last FOMC Fed meeting, UK GDP and inflation rate for the United States. And once again we remind, April 12 is the current official date of the UK exit from the EU. In general, it will not be boring and volatile, it means there will be a lot of opportunities for earnings.