News background and trading ideas for 10/04/2018

4 paź 2018

As we approach Friday, the markets will focus more and more on the monthly statistics on the US labor market. In more detail we will talk about it on Friday morning, but for now we note a very remarkable fact on the results of yesterday. This refers to data on employment in the US private sector from ADP. So, they showed that employment in the United States increased by + 230K in September against the forecast of + 184K. This is the maximum increase over the past six months. Such numbers can be a signal in favor of positive numbers on Friday and as a reason for buying the dollar.

Another event of yesterday which is worth noting the speech of the British Prime Minister Theresa May at a conference of the Conservative Party. Although all attention has been paid to her dance before the start of the speech. The rest was a product for internal use, in particular, May recalled that the UK is ready to withdraw from the EU without a deal. More important on this background is the desire to carry out the final draft of the agreement through Parliament. There really is a serious vulnerability for the pound, because May has no stable majority in the Parliament on this issue. Nevertheless, we continue to recommend buying pound - the big game continues.

In addition, the word was held yesterday by Fed Chairman Jerome Powell. His comments were very aggressive and gave strong support to the dollar. He said that the Fed, in its rate hike, is ready to go not only to their neutral state, but also further, down to the limits, when high rates begin to limit economic growth. Against the background of such statements, dollar purchases continue to be one of our basic recommendations.

We continue to follow the fundamental background around the Russian ruble, since one of our keys (and frankly, favorite) trading ideas is the sale of the ruble. So yesterday appeared quite interesting and somewhat iconic news. Very symptomatic in our opinion is the information that the auction for the placement of FLB (federal loan bonds) did not take place. That is, even domestic investors are not ready to invest in the public debt of Russia. Another actively discussed news is the de-dollarization of Russia. It reminds us of a shot in the own leg in protest and disagreement. Each of this news is symptomatic in its own way, but the symptoms are of the same disease. So, sales of the ruble with each such news is becoming more and more relevant.

Thursday, in terms of macroeconomic statistics and important news, promises to be relatively calm, so you can concentrate on working out our basic trading ideas. Today, these are purchases of pounds and US dollars, sales of the Japanese yen and the Russian ruble, as well as long-term sales of oil.