News background and trading ideas for 06/12/2018

6 déc. 2018

Unlike the rapid Tuesday, on Wednesday wasn’t no volatile pound's bursts neither a rampant gold growth, although we couldn't avoid another wave of sales in the US stock market. It was related partially with the close US financial markets due to mourning for George H.W. Bush.

Besides, China has somewhat defused tensions, which hastened to assure panicked investors that agreements with the United States are taking place and that China is going to carry out them as soon as possible. Although according to the reaction of the US stock market, obviously, not everyone believed.

The most relevant event of yesterday excluding the Chinese announcement was the reading out of outcomes of the Bank of Canada meeting. The rate remains unchanged. But, in general, the announcement had a “dovish” impact on the markets. It was related to concerns of the BoC about the much slower growth of the country’s economy. Accordingly, the chances for the rate hike sharply decreased. All these had a significant influence on the Canadian dollar, which has dropped to the minimum points since last half a year. Nevertheless, we recommend purchases of the USDCAD pair. Despite the sharp cut in oil production in Canada, the conclusion of the USMCA last weekend as well as the termination of the trade wars between the USA and China - it’s great signals for currencies in general and for the Canadian dollar in particular.

We continue to recommend buying the pound either. The government of Great Britain as much as possible was trying to low the grievance of the Parliament. It has, in turn, contributed to the strengthening of the pound. But recall one more time, the real growth of the pair will not be earlier the vote in the Parliament.

In the oil market, without much changes, since everyone was waiting for the OPEC meeting and its results. We continue to hold oil positions at a pause, awaiting news from Vienna. According to the results of the technical committee meeting, it is clear that nothing is clear. That is, it seems they want to reduce, but they cannot say for how much. In general, Iran stated in plain language that it is not going to cut anything. Recall Qatar leaves OPEC in January. In general, it is not a fact that OPEC will be able to reverse the situation on the oil market. We are watching.

From macroeconomic statistics, it is worth noting today the publication of data on employment in the US from ADP. These data are traditionally published on the eve of the release of official statistics from the Ministry of Labor, which will be announced on Friday. But we'll talk about it tomorrow.

Today, the list of our other trading recommendations is as follows: we buy gold intraday and mid-term, sell the Russian ruble on all investment horizons, ranging from intraday to mid-term and long-term. Finally, we continue to lean toward dollar sales in the foreign exchange market in general.