News background and trading ideas for 17/01/2019

Before we talk about the highlight event of Wednesday and what should we waiting for today, let’s briefly go through another yesterday’s news.

The house sales in the US in December decreased by 11%, which is another alarming signal for the US economy. Meanwhile, the shutdown problem has not been resolved and continues to set new negative scores. It has gone as far as Trump asked civil servants to work without payment in order to save the mechanism of governance of the country from collapse.

Oil reserves in the United States, according to the Ministry of Energy, showed a decrease of 2.683 million barrels, what is, in general, in line with foreseen of 2.500 million barrels. But the main thing, perhaps, was not this, but the output of oil production in the USA. Well, it bit a record in 11.9 million b/d. We continue to recommend oil sales. At least, as long as oil is below 53.50 (WTI brand), you should not be afraid of sales.

Whereas today attention has mostly focused on EU inflation statistics. However, it is unlikely can to sway disbelief of the markets in the capability of ECB to converse the vector of the monetary policy in 2019.

The UK consumer inflation came out in line with forecasts, but the pound wasn’t up to it.

All traders’ attention was drawn to the UK Parliament. Theresa May once again passed the durability test. 325 deputies have voted against her no-confidence, while 306 deputies decided to express their distrust. So, May continues to rule the country and to settle this Brexit epic.

The first thing she did after the outcome of the vote was that the invitation of all political leaders to discuss with a view to finding a compromise and developing such a plan for leaving the EU that would suit everyone.

Our expectations of the outcome are still positive, although it is not clear yet for how long it will take. Yesterday a number of European diplomats announced that the Brexit deadlines would be pushed back. This means that we will have more than one month of pound adventures. So we gain patience and continue to watch, and buy a pound from good points. The logic of what is happening every day becomes more and more apparent: a compromise is inevitable in conditions since its absence is bad for everybody.