News background and trading ideas for 05/11/2018

Let’s begin our first-week review with an analysis of highlight events of the last week. From the point of view of macroeconomic statistics, the main development was the publication of statistics on the US labor market (unemployment at the 48-year low and wage growth at the 9-year high). As we predicted, the data came out much better than forecasts (although we cannot but note that the predicted figure of +250K for NFP, we have announced earlier, completely matched with the actual one). Consequently, the dollar has ended a week on the up note. Moreover, the past week was finishing with a surge of optimism due to the possible agreement between the USA and China and rumors about the end of trade wars. We can’t relax, however, at least because there are mid-term elections to the US Parliament this week and surprises are more than likely.


Another relevant point of last week was a quite strong turnaround in the investor’s sentiment against the pound. One the growth of the pair GBPUSD on Thursday by almost 250 points is worth our attention. The cause is rather the replacement of the information vector, regarding the result of talks between EU and Great Britain than the outcomes of the Bank of England meeting. Markets again began to believe that there would be a deal. Actually, we have been talking about this for more than a month and recommend buying a pound on all fronts. Recall, that the potential growth of a pair of GBPUSD, extends to the area of 1.41-1.43, that is, it’s not too late to buy a pair and earn on it. Considering that they can announce a deal at any time literally, you shouldn’t wait with purchases. Particularly, a meeting of the Cabinet of Ministers is to take place on Tuesday, and so far there is no agenda for it, so perhaps tomorrow the pound will show another 300 points growth.

You can earn not only on purchases of the pound but also on sales of oil, as well as the Russian ruble. Particularly interesting in the near future are precisely the sales of the ruble. Let’s remind, that the "deadly" package of sanctions from the United States against Russia can be passed as soon as possible. Moreover, the ruble has not yet worked a 15% drop in oil. That is, there are plenty of reasons for its sales.

Another significant event of the current week will be the announcement of the Fed’s decision on the US monetary policy path. Note that it will take place not on Wednesday, as usual, but on Thursday (due to the elections). The rate most likely will not increase, so the comments of the Central Bank will be on the highlight. But we'll talk about this closer to the publication date.