FX Trader, Loonieviews.net
Summary: The greenback gained against the G10 majors, thanks in large part to the woes of sterling, which developed the attributes of a lead balloon as the Brexit crises became deeper still.
GBPUSD traded like the weight of the Brexit vote was on its shoulders. It was. Traders feared that Prime Minister Theresa May’s Brexit plan would be on the losing end of the parliamentary vote, scheduled for Tuesday. May feared likewise. She cancelled it. GBPUSD dropped from an opening level of 1.2715 to 1.2612 but bounced to 1.2635 by 14:00 GMT.
The drop in sterling since New York opened, contributed to US dollar gains against the G-10 majors. The Bureau of Labor Statistics said the JOLTS survey showed job openings were little changed at 7.1 million. EURUSD traded in a 1.1394-1.1420 range since the open but prices are unchanged as of 14:00 GMT. Traders are looking ahead to Wednesday’s US inflation data and Thursday’s European Central Bank meeting for direction.
USDCAD accelerated higher as WTI oil prices retraced the post-Opec production cut bump. The Canadian dollar is also suffering from concerns that the Bank of Canada is confused following last week’s dovish turn. Traders have already forgotten about the 94,000 new jobs reported in Friday’s stellar Canadian employment report.
Wall Street is in the red again. Increasing US/China trade tensions sparked by the Huawei CFO arrest, the retreat in oil prices and bad news for Apple (APPL: Nasdaq) is weighing on sentiment. AAPL is down 2.11% as of 14:00 GMT following reports that China banned the company from selling older phone models in the country. President Trump’s China tariffs got another result. GoPro (Gpro: Nasdaq) announced that it was moving all US-bound production out of China.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
