NFP, pound growth and gold

6 wrz 2019

Everything develops according to the scenario described earlier - Johnson’s defeat in Parliament is an occasion for the pound growth and its purchases. However, it’s too early to relax. Yes, the pound still has the opportunity to grow for not just a hundred points, but a thousand or even more. The key threat to the pound has not disappeared yet. So you should trade cautiously.

There is every chance that the ban on exiting without a deal will acquire the status of the law, which means Johnson will not be able to do anything. Even his brother Joe denied Johnson. So the streak of setbacks for the new prime minister is going on. But Johnson's failure is the success of the pound.

US employment data from ADP surprised us. + 195 000 with a forecast +148 000. And the data surprised us because recently the US economy has been showing more and more disturbing messages such as GDP data for the second quarter, and business activity indices, some even went below 50.

So, despite yesterday's figures from ADP, we are rather sceptical about official statistics on the US labor market. In general, today's data is more important than ever. On the one hand, weak figures will confirm investors' concerns that the US economy is losing its confidence more rapidly. And on the other hand, it will become a signal fo the Fed that it is necessary to do something. That is, the fate of the rate cut may not be decided on September 18 at the FOMC meeting, but today.

Therefore the dollar may receive a double hit, from which it will not be able to recover for a long time. That is why today we recommend selling the dollar across the entire spectrum of the foreign exchange market. But we need weak NFPs for that.

As for the trade war. The US and China negotiations were postponed. Now the date sounds like “early October.” That is, the confrontation will continue in September. So do not forget to buy gold.