Crypto Investment World

Weekly Game Plan 11 Jun 18

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There wasn’t any progress at the leaders G7 Summit in Canada, as Trump arrived late and left early. The most representative quote is possibly “We’re Like the Piggy Bank that Everybody is Robbing”. The G7 managed to send out a communique after the meeting ended, which was more an agreement to disagree on trade.

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Possibly the best picture taken during the recent G7 meeting.

Fortunately the markets were not expecting anything different, and the broad consensus is still that there will not be a full-blown trade war. So there shouldn’t be much commotion as Wellington opens up tonight. Moreover, Australian markets will also be closed which will further dampen participation.

So it should be a dull start to a volatile week, with FED, ECB & BOJ meetings due. Analysts actually expect the ECB meeting to be the most influential this time round (and we will be trading it live – reserve your spot!) after recent hawkish comments by Praet & co.  Instead, the FED should stick to script and raise rates (which is already fully discounted by the market) so the focal point will be the statement (hawkish/dovish) and the dot plot (3 hikes or 4 in 2018?). The BOJ will possibly come & go without being noticed.

Beyond central banks, there will also be a meeting between Trump and NKorea leader Kim Jong-Un and the Brexit Bill Amendments vote in the UK. The markets have underestimated the risks here: bullish risk is that PM May will be forced towrads a softer brexit stance; bearish risk is that the delta of an internal leaderhip challenge rises. The vote takes place across 2 days (June 12-13) so GBP could prove to be volatile until that’s settled.

Regarding macro data, the key releases will be US CPI& Retail Sales, UK CPI & Employment Change, AU Employment change and some Chinese data.

Going into a week like this, I feel like short-term positions may be the way to go ahead of the key central bank meetings. Attempting to establish core positions ahead of these events is risky business so my stance will be to remain flexible into the events, and possibly get a foot in the door as soon as possible after the events. So the initial watchlist this week might not mean much. WIth that said:

I remain bullish on Dow/SP500 and Copper, and there is some weakness in the Aussie coming through. I also still like Italian BTP shorts. Everything else is still in the middle of nowhere.

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