News background & trading ideas for 12/03/2019

12 mars 2019

Traders were discussing about the fall of Boeing yesterday. And it was about the tragedy in Ethiopia and about the sharp decline in the value of the company's shares (the company has lost 10% at the auction before the market opened). Despite some panic in the ranks of investors and users of Boeing aircraft (China even has temporarily banned using of Boeing 737 Max models), we believe that, it offered an opportunity to earn. We are talking about buying shares of Boeing. The panic settles, the flights will be resolved and the stock will be returned to its original state. A 10% profit in a short period of time is fair enough. Therefore, we recommend our readers to pay attention to an interesting trading opportunity.

The dollar continues to lose out in the foreign exchange market. Friday`s disastrous data wasn`t pointed enough for the Fed Chairman, and he stated in an interview with the CBS News that there is no clear timelines for the Fed`s current pause. This can be perceived in essence as a refusal to further increase rates by the Central Bank (at a certain level of fantasy, of course). The interview, in our opinion, is not in favour of the United States dollar. Although we note that yesterday`s data on US retail sales (0.2% m/m with a forecast of 0% m/m) slightly improved the mood of dollar buyers. But they were not so good that we changed our point of view. So, we continue to recommend looking for points for its sales in the foreign exchange marker.

First of all, we recommend doing it against the British pound, which rose quite well yesterday. However, today the fate of the pound in the hands of the Parliament of Great Britain. In the evening, another vote should be held on the text of the treaty between the EU and the UK. Apparently, the current edition of the treaty does not carry revolutionary innovations. And this means that the probability of failure is quite high.

We see the following plan of action: if they vote “for”, we buy a pound with targets of at least 300-500 points. If they vote “against”, the pound certainly will be sold out. And we do not recommend to participate in sales, because it seems to us a very risky occupation. On the contrary, we advise you to wait until the end of the active sales phase, and when prices begin to consolidate, buy a pound. The result of Brexit, after all, is important for the pound not the outcome of the vote. The only really scary option for the pound - “exit with no-deal” which is now extremely unlikely. So, that does not threaten the pound much.

Today we should pay attention to the data on consumer inflation in the US. Weak data could enter into resonance with Powell's interview and trigger dollar sales on the foreign exchange market.
As for our other positions: we continue to buy oil on the intraday basis. A power outage in Venezuela seems to be able to finish off the economy and the oil sector there. And this means that a large volume of supply is decreasing in the oil market. It is a bullish signal. We sell the Russian ruble on the intraday basis.