Intraday Market Thoughts

Crucial Trading Week Ahead

by Ashraf Laidi
Jun 11, 2018 21:04

Here is why this week will be the most important for financial markets so far this year. Aside from the Fed rate hike and ECB press conference on Wednesday and Thursday respectively, there are key inflation and jobs figures from the UK, CPI from the US, jobs from Australia and much more.  The video for Premium susbcribers is found below.

Kicking off all these events on Tuesday will be the much anticipated Trump- Kim Jong summit in Singapore. Aside from the historical element to the meeting, no breakthrough is expected without multiple meetings this year and the next. It's in the interest of both sides to get a deal, yet more so for Trump.

Tuesday will also see the UK jobs and earnings data, followed by the US CPI report. GBP traders shall await important developments in the lower House of Parliament where a set of votes related to Brexit transition and whether Britain stays in the Customs Union after leaving the EU in March 2019. The votes will take place on Tuesday and Wednesday.

Wednesday's release of the UK May CPI will shed light on whether inflation is easing further towards the 2.0% level, which will help determined odds of an August rate hike, which currently stand at 50%. 

The 2nd Fed hike of the year is expected on Wednesday alongside the dot plot forecasts, which will reveal whether one or two additional rate hikes are expected for the 2nd half of the year. Fed chair Powell's press conference will be thoroughly monitored and dissected, especially on the extent to which the Fed is ready to have a symmetric approach to inflation.

Thursday's ECB press conference should reveal whether the ECB will provide clarity on the timing of unwinding its QE program. Is the recent rise in inflation and weakness in the euro sufficient to communicate an end of the program by year-end? How will Italy play out in the mix? More details on the ECB and euro found here.

Thursday's Aussie employment data will be vital for AUD traders, fixated on the ensuing breakout in AUDUSD. Will any increase in net employment above 10K will be mostly from full-time jobs? The jobless rate is seen unchanged at 5.6%.

The FIFA World Cup kicks off on Thursday with the opening game between Russia and Saudi Arabia (the 2 weakest teams in the tournament according to latest FIFA standings) as Putin and MBS will likely meet to talk about the OPEC meeting in the week that follows.

Friday's Bank of Japan decision is the least important of all central banks and will likely be lost in the mix of the aftermath of the Trump-Kim summit and post-G7 deliberations and subsequent round of tariff retaliations. 

Don't forget my Tuesday webinar previewing my trades ahead of the week. Click here to register.


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