News background and trading ideas for today: 13.09.2018

Thursday promises to be uneasy, at least in the foreign exchange market. The matter is that today Bank of England and ECB will announce their decisions on the parameters of monetary policies. The current consensus is that the markets do not expect surprises: the parameters of monetary policies will remain unchanged.

Euro

But there are several things to concern. ECB may well bring some clarity about the future of monetary policy in the Eurozone. Let's remind, the markets expect the beginning of its tightening not earlier than the end of 2019. Accordingly, any hint of more aggressive actions from the ECB could well provoke a growth in demand for the euro. From the other side, the regulator can make a few changes in its own forecasts for several macroeconomic indicators. These changes may be in the direction of their decline due to trade wars, and this will play in favor of the euro sellers. Concluding, the reaction of the euro will depend on the nature of the comments. So, you need to follow the press conference and only after the announcement of the comments take decisions in accordance with those variants of the development of events that were voiced by us above.

British pound

As for the Bank of England. That possible negative for the pound surprise may be a review of the pace of economic development and fears of Brexit without a deal from the Central Bank. If there are no comments on this matter, and vice versa, there will be hints of further tightening of monetary policy in the UK, then the pound may sharply jump upwards. We are betting on the growth of the pound, because a) we believe in the trade deal between EU and UK; b) data on the economy of the UK in recent years have consistently outperformed forecasts, which in the aggregate unleashes the Bank of England for more aggressive actions or, at least, more hawkish comments.

Russian ruble

The current strengthening of the ruble in our view a good opportunity for its sales more expensive. New sanctions against Russia by the US are in the process, and they will be much more painful than all the previous ones. We are talking about the ban on transactions with the Russian national debt and the ban on dollar payments using correspondent accounts in the US for Russian state-owned banks. Against this backdrop, statements by the head of VTB that the dollar deposits of Russians can convert into rubles, seem to us a clear signal how bad everything is.

The US stock market

The US stock market and its technology sector continue to trample on the top, waiting for a reason for a new spurt. A deterrent was the news from Europe that Alphabet Inc., Google, Twitter Inc., Facebook Inc and a few other technological giants could be fined up to 4% of annual gross revenue due to the adoption of new legislation in Europe related to propaganda terror. Plus, investors are pressured by the oncoming hurricane Florence, which can become a record for the destructive force. But do not forget that the current upward rally is the longest in the history of the US stock market. Also, in 2018 we had the first trillion valuation companies. And all these happens against the backdrop of tightening of the monetary policy of the Fed!

Apple

All attention yesterday was focused on the presentation of Apple Inc. new products of the company. As a result, Apple did not disappoint and surprised the markets with the new iPhone, which is now the biggest and most expensive on the market. The experience of the last year shows that such a price policy justifies itself. The new Apple Watch was pleasantly surprised by the depth of improvements, the largest since 2015, when the product just appeared on the market. The focus of updates is on health monitoring. Even though investors reacted rather coolly to this presentation, we believe that this is largely because all the key information was leaked to the network before the presentation. But this in no way diminishes the prospects for Apple.