Exclusive Trading Signals and News

Mary Z

Trader
Dec 18, 2018
25
4
14
Hey guys,

December 18, 2018 10:55 AM

By: AnalysisWatch

Through the early European session on Tuesday, the Gold is trading flat early of the day after an attempt to breakout over yesterday’s high failed to attract enough buyers to extend the rally.

The Gold market continues to be influenced by a weaker US Dollar. A falling US Dollar in its price tends to increase foreign demand for dollar-denominated gold. Meanwhile, lower treasury yields and aggressive position-squaring ahead of the Fed’s interest rate and monetary policy decisions on Wednesday are also contributing to the market’s strength.
 

Mary Z

Trader
Dec 18, 2018
25
4
14
Any views and commentary in this communication are short-term views of the Barclays Trading and/or Distribution desks, have not been produced by Barclays’ Research Department and are not Investment Research, Non-Independent Research, Research Recommendations, personal recommendations or any other form of recommendation. For important disclosures relating to this communication, please see Sales and Trading Commentary Disclaimer below.




Good morning, in today’s report:

· Asian equities are under pressure ahead of today’s Fed meeting

· Italy reportedly reaches an informal agreement with EU on its budget plans

· Focus on today’s Fed decision at 19:00 GMT




Market News

· US equities closed slightly higher after a volatile session yesterday whilst most of their Asian counterparts traded lower overnight. At the same time, increased demand for haven assets like JPY and gold reiterates the cautious market sentiment ahead of today’s US interest rate decision

o Elsewhere, WTI Crude oil tumbled c.7% on Tuesday with continued fears on weaker oil demand

· Focus is on the Fed meeting tonight at 19:00 GMT with particular attention paid to the Dot plot, the committee’s macroeconomic projections and any comments on the state of the economy. A 25bp hike with dovish commentary is widely expected by markets

o Barclays Research expects a 25bp rate hike, but warns that the external economic conditions and elevated political uncertainty weighs on financial markets

o As a result, Barclays Research “looks for a modest downward revision to economic activity in 2019 and inflation in 2018 and 2019”

· EURUSD has briefly traded above 1.1400 this morning further to reports that Italy reached an informal accord with the EU on its budget plans for next year. An official announcement is expected at midday today with Senate approval needed by year-end (Reuters)

· GBPUSD reached a high of 1.2706 yesterday amid broad-based USD weakness. Today’s focus is both domestic CPI data but also on the EC’s publication of a new set of no-deal Brexit preparation documents which will consist of 14 proposed legal acts at EU level, to manage an abrupt Brexit




What to Watch for Today

· Today at 09:30 GMT we get UK CPI (Barclays Research: 0.2% m/m, 2.2% y/y | Consensus: 0.2 m/m, 2.3% y/y). Later at 19:00 GMT, the FOMC will make its rate decision (Barclays Research: 2.25-2.50%, Consensus: 2.25-2.50%) and at 19:30 GMT there will be a Press conference by Chair Powell