{"id":161384,"date":"2019-12-09T07:00:26","date_gmt":"2019-12-09T12:00:26","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=161384"},"modified":"2019-12-09T06:31:33","modified_gmt":"2019-12-09T11:31:33","slug":"week-ahead-uk-elections-trade-talks-and-central-banks-meetings","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/12\/week-ahead-uk-elections-trade-talks-and-central-banks-meetings\/","title":{"rendered":"Week Ahead: UK elections, trade talks, and central banks meetings"},"content":{"rendered":"
December 9, 2019<\/div>
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By Hussein Sayed, Chief Market Strategist (Gulf & MENA), ForexTime<\/a><\/strong><\/p>\n

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Traders and investors are bracing for a volatile week ahead as several events may determine the direction of markets for the foreseeable future.<\/p>\n

Will the Conservatives secure a majority in the UK election?<\/strong><\/p>\n

Looking at where Sterling stands now, it seems evident that currency traders have been pricing in a Conservative majority in Parliament. With only a few days remaining until voters head to the ballot box on Thursday, bookies and opinion polls are showing the Tories still on course for a solid victory.<\/p>\n

This would mean PM Johnson can get his Brexit deal through Parliament before Christmas, so taking the UK out of the EU by the end of January. Such an outcome will reduce uncertainty, but that wouldn\u2019t be the end of the story as the UK still needs to reach a trade agreement with the EU. Expect the Pound\u2019s upside to be limited in the event that the Conservatives win a majority on Thursday, as much of this outcome has already been priced in.<\/p>\n

However, traders should be reminded of the most recent UK election two years ago and also the referendum result in 2016. Financial markets got both those results completely wrong and so there is a chance this could happen again. The possibility of another hung parliament shouldn\u2019t be completely ruled out and traders need to be prepared for such a scenario. This would further delay Brexit and mean continued uncertainty for UK businesses and the economy, which in turn could hit Sterling hard and take it back below 1.28.<\/p>\n

US-China trade talks<\/strong><\/p>\n

With less than a week until the December 15 deadline for the US to impose new tariffs on China, investors will be closely watching statements from US and Chinese officials. As of now, all that we have heard about is that trade talks are heading in the right direction. However, there aren\u2019t any signs yet of a deal taking place in the next few days.<\/p>\n

With US equity markets holding near record highs, most market participants believe that new tariffs will be delayed. President Trump doesn\u2019t want to upset investors as we approach the 2020 Presidential elections as he needs to improve his approval rating. But given his unpredictable nature, it’s very difficult to anticipate his next move.\u00a0 A decision to delay tariffs for a few weeks, along with robust retail sales data released on Friday may provide a further push to equity markets. If Trump announces that December 15 tariffs will take effect, get ready for a big rally in safe-haven assets and a similar sized sell-off in stocks.<\/p>\n

Fed and ECB policy decisions<\/strong><\/p>\n

After Friday\u2019s robust US jobs report, Fed policymakers have strong justification as to why they will end the mid-cycle adjustment which has seen three interest rate cuts since July. We do not expect any significant change in language, but it will be interesting to see if growth and inflation forecasts have changed since September.<\/p>\n

Inflation data will be released on the same day the Fed announces its decision. If CPI moves above 2%, there\u2019s a chance the Fed will begin leaning towards tightening policy rather than loosening. That\u2019s especially the case if a \u201cphase one\u201d trade deal gets signed.<\/p>\n

The ECB is also expected to stand pat when it delivers its policy decision the following day. Instead, the focus will be on Christine Lagarde\u2019s press conference as she delivers her first statement at the helm of the central bank. Investors want to know whether her approach will represent a continuation of Draghi\u2019s policies or whether she has a different strategy.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n<\/div>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Hussein Sayed, Chief Market Strategist (Gulf & MENA), ForexTime Traders and investors are bracing for a volatile week ahead as several events may determine the direction of markets for the foreseeable future. Will the Conservatives secure a majority in the UK election? Looking at where Sterling stands now, it seems evident that currency traders […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-161384","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/161384","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=161384"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/161384\/revisions"}],"predecessor-version":[{"id":161392,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/161384\/revisions\/161392"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=161384"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=161384"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=161384"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}