Positioning ahead of G20

26 February, 2016

Interesting moves from China overnight as G20 Finance Ministers and Central Bank governors meet in Shanghai today and tomorrow. We’ve seen the yuan weaken this week for the first time in a month, with the PBoC describing its current monetary policy stance “prudent with a slight easing bias”. This is an interesting shift and the timing it also pertinent ahead of the G20 meeting. Previously, the tendency was for the yuan to strengthen into such meetings, to ease some of the criticism that the authorities were keeping the currency artificially low. The move could well entice some reaction from others, given the continued low level of global growth and that many developed markets would likely to see lower currencies themselves, to aid exports and also reduce risks of deflation. The bottom line is to keep an eye and ear out for further developments through the day.

We’ve seen some resilience on the part of sterling overnight, which was always a risk given the extent of the weakness seen through the week. But the recovery is marginal, nudging towards the 1.40 level on cable and not yet at yesterday’s lows on EURGBP. There is quite a slew of data released today, with business and consumer confidence in the Eurozone, together with German inflation and GDP data in the US. The latter will be closely watched given that the pace of annualised growth is seen falling from 0.7% to 0.4%. But keep eyes and ears open for more comments from official today and over the weekend.


Source link  
Divergence Between Fed and BoJ

The March FOMC meeting will be held for two consecutive days from today. The interest rate decision will be announced at 18:00 GMT on Wednesday 15th March...

Market Volatility Expected Ahead of President Trump's Speech

In a speech that will be watched by millions of viewers in the United States and around the world, the President is expected to speak of his presidency and address pressing issues like his plans for health care, the tax system, the military, and his goals for his administration...

Gold Trades Below Resistance Ahead of the Fed and NFP

We will see the release of the US ISM Manufacturing PMI, and ISM Prices Paid for January, at 15:00 GMT on Wednesday 1st February...


Sterling Struggles Ahead of Theresa May's Speech

Theresa May will make a speech outlining her plans for Brexit tomorrow, Tuesday 17th Jan, before the UK triggers Article 50 to leave the EU...

Dollar Turn-around on Trump's Press Conference

President Elect Trump's first press conference after his victory in the US presidential election, was held yesterday around at 16:00 GMT. It has caused great volatility to the dollar and the markets...

Gold Nears Major Resistance Ahead of Trump’s Press Conference

Gold prices have rebounded since mid-Dec after testing the significant support line at 1120. On the 4 hourly chart, gold bullish momentum has been strengthened since the beginning of this year, helped by the dollar retracement...


Searching for a new narrative

Popcorn at the read today as President elect Trump has a scheduled news conference later in the day (around 16:00 GMT). Markets have become used to listening to him in 140 characters or less over the recent weeks, so a more elongated narrative should be welcome...

The sterling conundrum

Yesterday's early weakness in sterling, on the back of the latest comments from PM May surrounding Brexit, took cable close to key support levels and the resilience seen through most of the post US election period has been unwound...

Selling into USD strength

In summary, Friday US jobs report was pretty much in line with expectations, although the slightly better data on earnings gave some support to the dollar into the end of the week. As a result, the US currency was little changed from Tuesday opening levels...

  


Share: