We have a week just like in the best blockbusters of our time. Uncertainty in Venezuela, where the incumbent President confronts each other, which are supported by Russia and the opposition leader, supported by the United States. The Fed meeting on monetary policy and the speech of the head of the US regulator Jerome Powell, which faces a difficult task, reassuring markets that the current situation is nothing but a pause, not a stop in raising interest rates.
China's second high-level trade dispute meeting with the US, where China intends to offer parity in imports/exports between countries. Hysteria, whose name is Brexit, because of the internal political conflict in London, which even made the Queen of Great Britain appeal to the people, calling for prudence.
And for dessert, a report on the Labor market of the United States, where the shutdown of the Federal government has already exceeded 30 days. Agree, such a busy week for volatile events is difficult to remember. Markets will start to rush from Tuesday, Monday, traditionally held in the preparatory key, and the market participants will listen carefully to the background and set expectations.
On Tuesday, the British Parliament will hold a meeting on the "plan B" exit from the EU. This will be discussed, in more detail, in the pound pair. On Tuesday, the USA will publish a consumer confidence index, which is steadily falling, taking into account the current state of Affairs in the US.
On Wednesday, the data will be released on the GDP of France, where riots continue, and Germany will publish the first estimate of monthly inflation, in the first economy of the EU. The United States will release the first estimate of GDP for the fourth quarter. And later, in the evening at 22:00 GMT, the Fed will hold a meeting on monetary policy, with a subsequent conference.
On Thursday, the attention will be focused on Europe, where the releases of GDP and unemployment will take place. It is also paying attention to the speech of the President of the Bundesbank Jens Weidmann. In the USA, the leading indicators will be released, such as the index of personal consumption costs, labor costs, and costs of individuals.
The week will end with the indices of business activity in the EU manufacturing sector and the first estimate of inflation for January. The United States traditionally report on the labor market on the first Friday of the month. In the context of the suspension of the Federal part of the government due to lack of funding for more than a month, this report will be very important.
The businessmen of Great Britain are already openly calling on their politicians to stop disputes over Brexit and finally agree on a legal exit from the EU. Many large companies are already preparing for an emergency exit from Britain in case of exit without a deal.
"We should put aside party policy, and at the time of need, which is at the moment, it is necessary to look at what is best for the country”,- said Reuters of Bob Sanguinetti, Executive Director of the British Chamber of Shipping.
"In the absence of viable alternatives to Agreement for withdrawal, we continue to move to the scenario without a transaction, which is detrimental to the economy, destructive and chaotic for business, manufacturers, and consumers”,- added Sanguinetti.
Indeed, the panic reaches its peak by the coming Tuesday, when Parliament is scheduled to hold a debate over the Brexit deal. Will the parliamentarians listen to the call of the largest companies present in the UK market? We'll know Tuesday.
Meanwhile, about 200 companies are looking for a way out in the worst case scenario. AstraZeneca reports that the maximum replenishes the medical supplies., the German concern BMW is looking for parking for trucks and warehouses on both sides of the channel, and P & G, in general, is going to transfer the registration of British courts to Cyprus, which would keep the tax agreement with the EU.
Today, the policy has the highest priority in trading the pound sterling. According to the results of the voting, tomorrow in London it will be possible to plan your trade in the medium and long term perspective. But, only shorts at the moment.
The elevated mood of oil traders gave way to consolidation. The week begins with a decline in quotations of black gold against a background of an increase in the number of drilling rigs in the US. The total number of drilling rigs has increased by ten units, which may signal an increase in production in the United States. At the same time, China continues to signal additional signs of economic decline. Against this background, the upcoming US-China trade talks in Washington this week are extremely important. As far as it became known, China intends to offer parity in import/export between the countries, which eventually eliminates the negative balance of the US trade with China. It was the negative trade balance that caused the current trade war. Therefore, what agreement will the parties come to this week, and whether they will come at all, will immediately be reflected in the raw material quotations. After all, any warming in the world of trade will spur demand for oil, which is now under pressure from the slowdown of many economies.
Until the clarify in trade relations, consolidation in the range of 51.5-54.5 is a priority. Any latest news that may affect the demand, will be immediately recouped in the quotation.