First full week of 2020 trade set to be an exciting one…
Markets will return in full-force this week as Christmas and New Year holidays draw to a close. Desks will be full once again meaning liquidity will be back to normal, potentially increasing volatility.
A key theme on many people’s minds is heightened tension between the US, Iran and Iraq. Global stock markets have already reacted negatively and could continue to do so until a resolution is found. In respect to FX, the usual safe-havens have been bought including the Swiss franc and Japanese yen. The US dollar has also seen a bid against the pound and euro. GBPUSD finds itself down over 5 cents since the night of the general election in December. Is there further room to the downside for this pair with this latest geopolitical event in mind?
On the data front, non-farm payrolls will take centre stage. In addition, there’ll be a number of PMIs participants will be eyeing. This morning from the UK, services PMI will be heavily scrutinised following a very weak manufacturing and construction prints last week. Even though we have a clear path to Brexit now, it appears the last 3 years pushed us into an economic malaise which may burden the UK for some time.
Have a good week.
Written by Viv Savani. 8:36am, January 6th 2020
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