Trading Plan – Tues 27 Aug: G7 Trump drives equities down, then up; GBP shines

Mark NugentAug 2019, Trading Plan

Trading Plan – Tues 27 Aug: G7 Trump drives equities down, then up; GBP shines

Last week was a quiet week ahead of the G7 meeting in France over the weekend. Things kicked off on Friday when China announced retaliatory tariffs against the US to come into effect at the same time as the next tranche of US tariffs (1st Sept). Trump immediately increased current and proposed tariffs by 5%. Equities plunged. Trump also seemed to decree (without the power to do so) that US companies leave China. I’m not even going to discuss Trump’s suggestion to nuke hurricanes before they get to the US shore.

Powell spoke at the Jackson Hole summit and said he was concerned about three things: slowing global growth; trade wars and muted US inflation.

On Brexit, there were positive soundbites from Merkel and Macron on Brexit.

Equities were doing OK until Friday, with all indices closing down on the week after Friday’s slew of sentiment-killing announcements.

On FX, the star performer was the GBP; the USD took a step down; all three commodity currencies were down, as you would expect given the sentiment, JPY was up on negative sentiment and the EUR moved up ever so slightly.

This week, Trump has been emollient at yesterday’s final day of the G7, not just on China but on Iran and the French tech tax situation. Equities rebound. The economic calendar this week is centred around Thursday and Friday. I will be looking at equities and trading the weak commodity currencies against strong counter-currencies.

Have a great week.

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