What to expect this week: main events and our recommendations

25 нояб. 2019 г.

The volatility in the foreign exchange market reached its minimum in recent years. The VIX Fear Index was also confidently at the bottom.

The absence of significant events entailed the absence of strong movements in the foreign exchange market.

Friday perhaps was the exception. Another weak statistics from the Eurozone and the UK contributed to the activation of sellers of the euro and the pound.

The main concern for the markets was the adoption by the US Congress of an act in support of protesters in Hong Kong. China reacted extremely painfully to this, considering it was interference in its internal affairs. And since the first phase of the trade deal between the US and China is already at the finish line, this could potentially lead to the disruption of the deal. But on Friday, Trump said he would veto the bill.

In the USA, in the meantime, the impeachment process continues, which in itself is a kind of guarantee against a sharp rise in the dollar value in the foreign exchange market.

So, despite the activation of buyers of the dollar on Friday and sellers of safe-haven assets against the background of such news, we still see no reason to revise our trading preferences. And on Monday we will buy the pound and the euro against the US dollar, and we will also buy gold and the Japanese yen.

Rising oil prices stopped on Friday, as we expected, our recommendation to sell oil has become even more relevant. Do not forget to sell the Russian ruble as well.

As for the upcoming week, it has a chance to become low-volatility. Data on US GDP is formally extremely important, but it will be a revised value, that is, the probability of surprise appear is low.