background image

NY Open: The stage is set for a big finish to January

Forex 4 minutes to read
MO
Michael O’Neill

FX Trader, Loonieviews.net

Summary:  Next week is the end of January and FX markets are poised for a big finish. There is another UK parliamentary vote on Theresa May’s Brexit Plan B, a FOMC meeting, nonfarm payrolls data and the possibility of month-end portfolio rebalancing high jinks


There is increasing optimism for a positive result for Brexit Plan B at Tuesday’s vote, but the debate is far from settled. The UK Sun reported that Northern Ireland's Democratic Unionist Party would back Prime Minister May’s plan, and that has traders wary of a vicious short squeeze higher.

The Federal Open Market Committee meeting could be a barn-burner, especially if Fed Chair Jerome Powell answers questions about his apparent flip-flop between the December 21 press conference and his January 4 speech. The committee is widely expected to leave rates unchanged.

The consensus forecast for Friday’s nonfarm payrolls report is for a gain of 168,000 jobs, well below Decembers 312,000 increase, but still healthy.

Other flash-points include the US government shutdown and the US/China trade talks. Positive developments from either one them would boost Wall Street and spark a bit of a “risk-on” rally in FX.

The US dollar is on the defensive. The major G-10 currency pairs all posted gains since this morning’s open, and they are making a serious run at eliminating all their losses since last Friday’s close. Only the Australian dollar is underwater, as of 1345 GMT. NZDUSD is leading the charge higher, but it is an extremely close race. USDJPY is the laggard, and it is unchanged since the open. GBPUSD appears to have snapped the downtrend line from April 2018 with the break above 1.2980 on a daily chart which puts 1.3250 in play.

US stocks are higher as Wall Street follows the lead of European bourses. Prices are supported by a mix of profit-taking, some positive earnings reports, and the mildly improved outlook for US/China trade. However, the major indices need to climb a lot further to get back to Tuesday’s levels.
gbpusd
GBPUSD daily. Source: Saxo Bank

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

Content disclaimer

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Bank A/S and its entities within the Saxo Bank Group provide execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer and notification on non-independent investment research for more details.

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

Apple and the Apple logo are trademarks of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.