The week results: many events but few changes

20 ene 2020

The previous week was rich in important events, some of which can be formally classified as “game changers”, but judging by the dynamics of prices in the financial markets, the game did not undergo any special changes.

Let's start with the most global. The United States and China signed documents on the first part of the trade deal. But there was no euphoria - almost immediately it became clear that this was really only the first step towards solving the problem. Hundreds of billions of dollars in tariffs remain in force, and harm to the global economy will continue to be done. China's GDP growth rate in the fourth quarter of 2019 was minimal over the past 30 years, which is the best illustration of the previous phrase.

Other macroeconomic statistics released last week clearly confirmed this. The UK was the most disastrous data: GDP, industrial production, retail sales - all in the red and much worse than forecasts. Statistics from the US and the Eurozone also did not shine: industrial production in the States and the Eurozone came out in the negative zone.

In general, against the backdrop of such statistics, we were once again surprised at new historical highs in the US stock market and became even stronger in our belief in its imminent decline. Madness cannot last forever.

We already wrote about Putin’s initiatives and Medvedev’s resignation in Russia. We only note that the sale of the Russian ruble after the sale of shares in the US stock market and gold purchases, in our opinion, is one of the most promising positions in the financial markets as a whole.

Speaking of gold. After the gold sellers could not get anything out of the signing of the agreement between the USA and China, we became even more fond of buying this asset both within the day and in the medium term, especially after gold returned above 1550. The Japanese yen, although it looks weakened, also It is a good alternative to gold, but in the foreign exchange market.

Speaking about the upcoming week, we note that it promises to be even more interesting. It can be called the "Central Banks Week". The Bank of Japan, Bank of Canada and the ECB will announce their decisions on monetary policy parameters in their countries. And although experts do not expect global changes, given the weak form of the global economy, one can count on fairly “pigeon” sentiments in the ranks of the Central Banks.