News background & trading ideas for 11/03/2019

Last week was not a calm one. The ECB has surprised everyone with news about the euro. The ECB sharply lowered forecasts for economic growth in the Eurozone and announced the launch of the third long-term lending program.

But the data on the US NFP was the main surprise. With forecasting employment the outlook outside the agricultural sector was in the amount of + 180K (February), but the fact is that another figures appeared, it is + 20K. We warned about something similar in Friday’s review and recommended to sell the dollar in advance. The data on rates of unemployment and the average hourly wage was a bit softened the blow, which came out better than expected. But overall, with such data on the NFP, our position on the dollar has only strengthened, and this week we continue to recommend its sales.

One of the good candidates for this is USDCAD. The fact is that Friday's data on employment in Canada was very pleasantly surprised. Therefore, we have a double reason for selling USDCAD. Sum up, we are looking for points for selling USDCAD on the intraday basis.

As for the current week, the main event is the next vote in the Parliament of Great Britain on the date in UK's divorce from EU. Last week, the pound was under strong downward pressure due to the lack of progress in negotiations between the EU and the UK. Accordingly, traders fear the next failure of Theresa May in Parliament. Two weeks prior to the date of the official release the date of the divorce from the EU. Our position is unchanged - we are looking for points for buying pound, because we are sure that there will not be divorce with no deal. However, it does not negate the very likely decline of the pound today and tomorrow.

The negotiations between the USA and China continue to be in focus. The results of the Bank of Japan meeting will be observed with interest, which will be announced on Friday.

What about the macroeconomic statistics we note that the most interesting is the data on retail sales and consumer inflation in the United States.

There is no change in the oil market. The official oil reserves in the United States increased last week, but the number of active drilling rigs, on the contrary, decreased quite sharply (by 11 units). These are bullish signals. So, we continue to recommend to look for points for buying it on the intraday basis.

Do not forget to sell the Russian ruble. After the crushing data on the NFP, considering the fact that the asset is above the 1295, today we are buying the gold with small stops.