China and the US have achieved the so-called Phase I deal. It seems that the conditions on it are satisfactory enough for both parties, as well as the markets, which on the last day of the week made a profit news, but will definitely “sleep” more quietly. Now, with the end of the year approaching, the promising prospect of a Phase II deal opens and is finally completed in the trade war.
On the Old Continent, Boris Johnson solidified his position as Prime Minister with a solid majority. With the strengthening of our political status, the hopes now that the political environment will be strengthened and that we will have Brexit on January 31 are higher than ever. And it was at that momentous moment that the UK, US and China struck a deal, and Trump didn’t forget to congratulate B.J. in an exceptional way.
What awaits us in the pre-holiday week? Market optimism, which is likely to continue today and into next week, with risky assets expected to remain appetizing as the holidays approach. We are entering a period in which stocks are rising in price ahead of the festive season, so with the Christmas spirit and better sentiment, we will expect cash flows to remain in risk on mode. In the circumstances, we would be more comfortable considering it a potential Christmas rally.
Next week we start on a busy Monday with the start of the Asian session. PMI for Japan, China’s industrial production and unemployment rate. During the European session, we will expect data from the Eurozone, Germany, the United Kingdom and the US on manufacturing PMI, PMI in the services sector and NY Empire manufacturing index for the US.
Tuesday – AUD Traders Consider – RBA Minutes. With a “good morning” for Europe, we will see UK hourly wage and employment data. Later, US permits for building, starting new homes, and industrial manufacturing for the US will keep us nailed, and after the end of the US session, oil traders will expect API data for weekly stocks.
On Wednesday Asia will welcome us with Japan’s trade balance and New Zealand with the business confidence of ANZ. For Europe – morning IfO business climate in Germany. CPI later for the UK, Eurozone and Canada. Before the start of the Asian session – New Zealand’s GDP and trade balance.
Thursday, the data cannonade continues with the shift in employment for Australia in the small hours and the unemployment rate. As the sun rises in Europe, we will see the decision on Japan’s interest rate and the BOJ press conference. UK retail sales and BOE’s interest rate and report decision will keep (again) live on the pound traders. In the US pre-market session, we will await data on initial requests for benefits, sales of existing homes and the Philadelphia Production Index.
At Friday’s pace, CPI for the Land of the Rising Sun when opening the Asian markets. At 09:00 for Germany we will see the GfK consumer climate for Germany. Later in the UK we will expect GDP data and Canada will retail. At 5:00 PM for the United States, we will see Michigan consumer sentiment data and the number of Baker Hughes oil rigs.
Use the weekend to recharge, take time for yourself. With renewed strength, make plans for the new week.
Trader Martin Nikolov