News background and trading ideas for 14/11/2018

14 нояб. 2018 г.

Yesterday has proven to be a quite volatile day and was remembered by the emergence of a “draft” treaty between the UK and the EU, another big fall of oil and statistics on the UK labor market. Let’s begin with Great Britain, all the more since the pound this week - is the main provider of volatility in the foreign exchange market.

In general, the data came out quite good, particularly the average wage, which excluding bonuses, was much better than forecasts and significantly higher than the previous value (by the way, the maximum salary increase since 2008). Why is this indicator so relevant? The thing is that the Bank of England is now at a crossroads - to raise its interest rate or not in the foreseeable future. Such data is pushing the Central Bank towards the next rate hike. For the pound, this is a completely bullish signal. Actually, its yesterday’s increase in the afternoon is a confirmation of that.

Today is equally important for the pound - statistics of the customer inflation of the UK will be released. Do not either forget that the future of the pound is anyway decided in the Brexit front instead of on statistics’ fields. And we’ve got a breaking news from this front - the UK and the EU have concluded a “draft” of a deal. The thing is that the crucial step was finally taken.

Recall that our medium-term position is buying of the pound with targets around 1.41-1.43. In this regard, it is quite characteristic that the main players began massively to turn over on a pound towards its purchases. In particular, yesterday was the information on the markets that Merian Global Investors (in the running of the foundation about $45 billion) added to its long positions in the pound in the hope that the UK would reach the divorce settlement with the European Union. The purpose of purchases - 1.40. Aberdeen Standard Investments even expect a rally to 1.50. As we see, the big players join our point of view, which we have been voicing since September.

On the oil market, the historical record was fixed yesterday - the oil has been declining 12 days in a row. Efforts by OPEC+ to return the forces to the bulls were suppressed by Trump, who did another tweet intervention and said that oil is still very high. Markets are tending that the United States will “pushed” Saudi Arabia and they will not bind the oil valve.

Gold some slowed down a fall yesterday. Recall that the current prices seem to us as a good chance for buying with small stops and significant profits.

Sales of the Russian ruble remains as our favorite position.