Market Review 25. February – 1. March 2019.


Yesterday, the President of the United States, Donald Trump, announced the postponement of the deadline for a trade truce for an indefinite period, citing the productivity of the current trade negotiations. The fact of delay tells us that the conclusion of a trade agreement is becoming more and more realistic. This news will warm up your appetite for risk, and the American dollar will lose its position. On the other hand, this is exactly what Trump needs.

The American Democrats have already begun to hint at preparations for the presidential race next year. Trump begins to focus on the middle class of the population and his tax rebates would be very useful, but whether the Democrats will miss them, remains unknown.

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Against this background, the optimism for the US dollar will be recouped weaker. Whereas for the euro, on the contrary, any positive will be exaggerated. Unless of course Trump starts a trade war with Europe this week, in this case the dollar will once again be in the position of a defensive asset.

As it happens most often, the most volatile news begins to come out from Tuesday. The US real estate sector will report issued by building permits, the volume of construction of new homes and a composite index of the cost of housing. In the late afternoon, consumer confidence index from CB will be released. On the same day, Federal Reserve Chairman Jerome Powell will begin his two-day speech in Washington, with pauses to answer questions.

On Wednesday, there will be preliminary data from ADP on the change in the number of people employed outside the agricultural sector in February. Therefore, as the current month is short, official data is expected next week. Equally important will be the basic orders for durable goods.

Thursday will probably be the most important day for an American, since the next estimate of GDP will come out old. Members of the Federal Reserve will not be bored, because on this day a whole marathon of performances will take place. From Richard Clarida to Raphael Bostic, Patrick Harker, and finally, Robert Kaplan.

On Friday, attention will shift to the Euro zone. The European Union will report business activity, inflation in February and the unemployment rate. The US will also report business activity, and the Michigan Institute will tell about consumer sentiment and expectations.

In general, bullish mood is expected in the main pair throughout the week.



The pound will continue to dance on political sentiment in London. The British government is considering various options for action if the Parliament rejects the deal of its Prime Ministers Theresa May again. May has only two weeks left if she wants to leave the EU according to the current deadlines, and she again postpones the vote.

The decision to postpone the vote, which the prime minister is trying to change in negotiations with the EU, was due to the fact that she might be forced to extend Article 50, which would begin the two-year Brexit negotiations after March 29.

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However, the British Premier is of the opinion that any extension will only delay the Brexit decision itself. This is not a way out of the deadlock in parliament, namely, to approve a deal or not.

Tomorrow May will give a speech on this matter, immediately after hearing the report on inflation in the country. On Wednesday, data on the housing prices in Britain are expected. On Friday, there is data on business activity in the manufacturing sector of the United Kingdom.

It is too early to talk about the postponement and extension of Article 50, but so far, everything is moving towards this. The parliament does not go to meet its prime minister, and the prime minister cannot change the deal with the EU, as she herself had signed it earlier. Therefore, we are stuck in this vicious circle.



Black gold remains bullish. Weak support was provided by the reduction in the number of drilling rigs last week by four units, as reported by Baker Hughes. Nevertheless, today the United States is the leader in the extraction of raw materials, with a level of 12 million barrels per day.

An additional driver, as you know, is the US-China negotiations. After the news about the postponement of the deadline in the truce between the largest economies in the world, market participants increasingly believe in the conclusion of a trade agreement. No deadline has been announced yet. However, the US President Donald Trump informed his congressional representatives that he plans to meet with his Chinese counterpart, Xi Jinping, in a week, maximum two, to sign the agreement.

The report on raw material stocks in the United States, as well as the latest news from the countries participating in the oil cartel, which, for the time being, may keep the reduction, given the rise in prices for raw materials, will also be important.