From MidEast tensions to Trade deal hopes

Focus shifts to the expected signing of a Phase 1 China-U.S. trade deal as World markets looked to have overcome the MidEast tensions.

The US and Iran have maintained a high level of rhetoric last week, but the lack of imminent action allowed markets to calm .

The U.S.-China Phase 1 agreement, due to be signed at the White House on Wednesday, marks the first step toward ending a damaging 18-month trade dispute between the world’s two largest economies.

Although markets have yet to see the details of the agreement the main event of the week will be the signing of the Phase 1 trade deal. The Trump administration has invited at least 200 people to the White House for the ceremony. However, the 86-page Phase 1 agreement has not yet been made public.

On Friday the US Non-Farm Payrolls fell short of expectations with only 145K jobs gained and wage growth slowing to 2.9% yearly. However, other figures were upbeat, and the greenback managed to shrug off the disappointment.

The EUR/USD posted slight losses last week.

GBP/USD enjoyed a second straight excellent week.

The AUD/USD lost ground last week for a second straight week, as the pair closed at the 0.69 level.

The Dollar/yen posted gains of 1.2% last week, recovering the losses from the previous week.

It was a winning week for USD/CAD for the first time in six weeks.

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LQDFXperts – The week ahead – From MidEast tensions to Trade deal hopes

A somewhat busy week from the UK is in store with high impact events such as inflation and retail sales coming up. Further, investors will be keeping a close eye on U.S. inflation and retail sales report in the upcoming week.

The European Central bank will be releasing its monetary policy meeting minutes this week. It was the first ECB meeting under the leadership of the newly appointed chief, Christine Lagarde. Investors will however likely get insights into how the ECB is functioning under the new leadership.

On Monday (13.01) the UK monthly Gross Domestic Product report for November is set to provide another insight into the fourth quarter of 2019. Back in October, the economy stagnated, just after the UK economy escaped a recession in the third quarter.
On Tuesday (14.01) focus shifts on US Inflation. The Federal Reserve has been expressing frustration with the lack of inflation – which is a global phenomenon. The figures for December will likely show that the Core Consumer Price Index remained around 2.3% recorded in December.
On Wednesday (15.01) the UK inflation is expected. Lower energy prices and other factors have contributed to a drop in British CPI – 1.5% yearly in November 2019. The figures for December are expected to remain unchanged.
On Thursday (16.01) all eyes are on US Retail Sales. Consumption consists of 70% of the American economy. The numbers will likely be better in December than November.
On Friday (17.01) The University of Michigan’s first estimate of consumer sentiment – US consumer confidence – for 2020 is set to edge up 0.1%, reflecting strong confidence.

Follow this week’s economic calendar.

PLEASE NOTE The information above is not investment advice.

Sources: Reuters, CNBC, FX street