Análisis de mercado diario

Asian stocks are painting a sea of red, as investors grow skeptical that the US and China can exhibit enough will to sign a limited trade deal by next month. Most Asian currencies are now also weaker against the US Dollar, while safe havens such as Gold and the Japanese Yen are advancing.

Given that the US Senate has just passed legislation in support of the Hong Kong protests, such a move threatens to drive a wedge into ongoing US-China negotiations while potentially raising the barrier to a trade deal. Considering that the US and China are struggling even to agree to “phase one”, which had been deemed as more digestible, hopes for a swift conclusion to the trade conflict have clearly been misplaced. The drawn-out nature of “phase one” only points to bigger obstacles ahead, if and when trade talks enter phase two. In order to maintain the current levels of risk appetite in the markets, trade talks must bear fruit soon, or risk investor focus shifting back to the gloomy economic data, as further evidenced by Japan’s October exports seeing its sharpest drop in three years.

Pound offers lukewarm response to Johnson-Corbyn debate

GBPUSD offered a tepid immediate response to the first televised debate of the current UK election campaign, while the Pound is now weaker against most Asian currencies. The historic exchange between Boris Johnson and Jeremy Corbyn presented scarce fresh insights, with the snap poll following the debate suggesting that there was no clear winner, which offered Pound traders little to hang their hats on.

With Sterling’s latest assault on the 1.30 level versus the US Dollar falling short yet again, the currency pair had moderated in the hours leading up to the debate, before settling just above the 1.29 mark at the time of writing. The Pound has also come off its strongest level against the Euro in six months, only to post slight gains versus the bloc currency during the debate. Over the next three weeks, expect the Pound to remain primarily swayed by the political nuances during this campaigning period.

Gold gains as markets begin to doubt trade deal prospects

Gold has broken back above the $1470 psychological level, amid dimming hopes of a US-China trade deal. Bullion is expected to end the year with its double-digit annual gain intact, even in the event of a signed limited US-China trade deal. While not a base case for most investors at present, a complete capitulation in ongoing trade talks should send Gold surging back above $1500 while potentially paving the way for a global recession.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

The European Central Bank (ECB) is stepping in again to support the economy. But markets aren’t buying it. EURUSD sank by over one percent, dipping below 1.118 before climbing back closer to 1.12 at the time of writing, hovering at its lowest level since June 2017.

The ECB confirmed reports leading up to yesterday’s policy decision, by unanimously choosing to issue a new series of cheap loans to banks and keep rates on hold at least until the end of 2019. The central bank also downgraded its forecasts for both inflation and economic growth. Needless to say, none of this is positive news for Euro buyers.

Given the drop in the Euro, markets appear to be interpreting this decision as yet another instance in which the ECB is behind the curve. With growth and inflation still very much on feeble footing, one interpretation is that previous rounds of “policy accommodation” have failed to sufficiently boost the Eurozone. The ECB’s latest round of stimulus also indicates that the economy is far from being able to stand on its own, and is still reliant on “added accommodation”. They’re concerned enough by the worsening outlook to warrant a fresh round of stimulus, just three months after ending their bond-buying programme.

Also note that Europe is still having to contend with “pervasive uncertainties”, as Mario Draghi described it, including Brexit uncertainties, cooling growth in China, and the still-unresolved nature of trade talks between the US and China.

All this paints a very gloomy outlook for the Eurozone for 2019, leaving Euro bulls with the enormous task of having to prove their case.

China External Trade Slumps in February

Beyond the dovish ECB forecast, investor confidence is taking another hit with China missing its February external trade target.

Exports declined by more than 20 percent, with imports declining by over five percent; both far below market expectations, even after factoring in the Chinese New Year holidays. The threat of US tariffs and a slowing European economy have weighed on Chinese shipments, adding to concerns surrounding the world’s second largest economy.

While China has revised its 2019 growth targets to 6.0-6.5 percent, policymakers in Beijing have promised stimulus measures, including a three percentage-point cut to its Value Added Tax. Should these stimulus measures start to take effect and reflect positively in China’s economic data, this may encourage risk-on sentiment to be reflected in the Yuan, and other Asian currencies.

For now I would however expect risk sentiment to be carried by the recent return of fears over a slowing global economy.

US February NFP Closely Watched

With the EU and China dragging global growth, coupled with Brexit uncertainties, this leaves the United States as the bright spark in a gloomy global economic landscape. Economic divergence is back in the air, meaning the Greenback has returned as the chosen one for investors’ number one currency. It is no coincidence at all that the Dollar Index extended to its highest level of 2019, at the same time that a downbeat Draghi and ECB drove the Euro to its lowest levels of the year so far.

February’s US non-farm payrolls, due later today will be the latest indicator of the resilience of US economic growth. While markets project hiring to have moderated compared to January, it’s still expected to keep with the broader storyline – the US economy is on solid ground and more importantly, it remains way ahead of its developed peers.

This week, the US Dollar reached a new high for 2019, and may climb even higher should the NFP surprise to the upside. If the global outlook deteriorates further, that may prompt investors to engage in the divergence trade and seek shelter in the Greenback, despite the dovish stance currently held by the Federal Reserve.

To sum up, March is proving to be a busy month for global financial markets. We are only at the conclusion of the first trading week of the month and there are already a number of different risk events ahead.

All investors should be mindful of more potential risks, what this could mean to their portfolios and potential trading opportunities ahead. 

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

The first full trading week of 2019 may be characterized by improved investor sentiment, return of risk, and much less volatility in equity markets. Thanks to the U.S. FOMC minutes and Fed talk that has shown a willingness to delay further tightening of monetary policy in an obvious sign that policymakers are listening to the markets. This factor coupled with a return of U.S.–China trade negotiations provided a boost to global and U.S. equities. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite posted solid gains last week of 2.5%, 2.4% and 3.5% consecutively. 

The Fed’s shift to a relatively dovish tone is undoubtedly good news to risk sentiment but not enough to keep bulls in control.  Many catalysts may support or end last week’s market recovery including earnings announcements, macro data, the U.S. government shutdown, and Brexit vote.

Data released earlier this morning from China was not encouraging. The world’s second-largest economy reported the biggest monthly fall in exports in two years, confirming beliefs that the global economy is heading into a slowdown. Increased tariffs by the U.S. are to be blamed, but only partially because Chinese exports to the rest of the world also declined. As a result to the surprisingly negative figures, Asian equities fell and futures pointed to a lower open for Europe and the U.S., while high beta currencies like the Australian and New Zealand Dollar experienced the biggest falls amongst major currencies.

Investor appetite to equities will be heavily tested this week as Corporate America begins to announce earnings results for Q4. Citi Group is the first major U.S. bank to report results today. JP Morgan and Wells Fargo will follow on Tuesday. Goldman Sachs and Bank of America will be announced on Wednesday, while Thursday will be Morgan Stanley along with Netflix. Investors need to keep an eye on loan growth figures as they reflect confidence in the overall economy, any increase in provisions, M&A activity, and how the shutdown may impact the real economy in the eyes’ of the banks.

The Brexit vote is likely to capture most of the headlines this week. Tomorrow the House of Commons is set to vote on UK Prime Minister Theresa May’s Brexit deal.  It is expected that the bill will be voted down, but this won’t be the most significant factor influencing the Pound’s direction, it’s what will happen next. Are we going to see a no-confidence vote in the government? Or another attempt by Theresa May to secure concessions from the EU? Will there be an Extension of Article 50? Or even extreme scenarios such as a new general election and a second referendum? Each of these scenarios will have a different impact on the Pound.  As of now, investors seem to be on wait-and-see mode as Sterling is holding against the Dollar near 1.2850.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.