Posted May 21, 11:14

World Trade Overshadowed by Indices

CPI (y/y) May 22 08:30
World Trade Overshadowed by Indices  Chart
7 hours ago: 

It is a session light of data with the USD edging higher and the Aussie underperforming all major currencies following fresh rate cut hints from the RBA. Global indices are in the green after a late session rebound in NY yesterday. Activity picks up tomorrow with UK CPI and Fed minutes, EU Elections on Thursday and UK retail sales on Friday. Also watch any response from Beijing to US ban on Huawei. The video for Premium subscribers below focuses on GBP, gold and indices. A new trade action will be issued on one of our index trades.

Trade Becoming a Problem

Now that the US and China have demonstrated they're in no rush to reach an agreement over the trade spat before June, the impact on global growth could well become a problem, sufficiently serious to not be adressed in time by the Fed and other major central banks. Here are some figures: 

PREMIUM INSIGHTS Update: May 20, 14:30
Where to now for GBP? May 20, 2019 12:19: 

You know the market is admittedly clueless about sterling's future direction when the experts themselves are saying: "it could go 1% up or 1% down" or, to hear an answer worded in the following manner: “If the Withdrawal Agreement is accepted…., then we will see ….and if it is rejected, then….”. I highlighted in last week's chart that implied option volatility on GBPUSD for appears excessively supressed, considering the sharp descent in spot GBPUSD. Those who are bearish GBP will tell you the market is being complacent and volatility is underpricing the risk of heightened political uncertainty (PM May having to leave and allowing a leadership vacuum behind her). Those who are bullish or neutral GBP will explain the relatively low volatility by either indicating that it's too early, referring to the vote in two weeks' time. Others would stated that a smooth Brexit is inevitable.


Lame Duck May? May 17, 2019 11:56: 

UK Labour leader Corbyn has just announced the breakdown of Brexit talks with PM May's Conservatives. May blamed it on divisions in the Labour Party. This sets set the stage for her departure, whether or not a Brexit withdrawal agreement passes in the first week of June. But what about the indicative votes? (see below). Could this eventually set the stage for a rebound in the pound as it fell once again Thursday. All currencies are down against the USD with the exception of the yen as risk dips back down. Monday's long DOW30 Premium trade was closed yesterday at 25870 for 450-pt gain. The other index trade remains open.


The Strongest & Weakest

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