 It was a rough ride in the financial markets last week. Stocks were initially pressured in concerns over US-China trade negotiations. US President Donald Trump threw the idea that waiting until after 2020 election before closing the phase one deal. Sentiments were additionally weighed down by a string of weaker than expected economic data. Nevertheless, investors cheered Friday's better than expected job data while Dollar rebounded notably. Still, the greenback ended as the worst performing. Canadian Dollar was the second weakest, as poor job data outweighed hawkish BoC. On the other hand, New Zealand Dollar was the strongest, followed by Sterling. High volatility will very likely continue this week considering the high profile events featured. Firstly, the "natural deadline" of December 15 for US-China trade negotiation approaches. We'll quickly know if there is a deal, or at least progress, to avert the new tariffs on USD 156B of Chinese imports. Secondly, Sterling is currently pricing in a Conservative majority after December 12 elections. With that, Prime Minister Boris Johnson's Brexit deal should be approved quickly to pave the way for orderly Brexit on January 31 finally. Thirdly, three central banks will meet, Fed, SNB and ECB. Fed fund futures are pricing in near 100% chance for Fed to stand pat. Yet, the traders would be eager to know if policy makers are projecting Fed to stay on hold throughout next year. It will also be Christine Lagarde's first ECB meeting as President. |
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