May vs Parliament, lira fevers, and sales have dropped off in US

2 apr 2019

Monday was a very busy day for financial markets. It was partly due to the processing of weekend news (May's statement on Brexit, the results of the elections in Turkey), partly with new news stories. But first things first.

Brexit news. May’s attempt to hold the fourth vote in a row failed so far. Monday didn’t bring anything new to the current Brexit scenario.

What do we have today? Postponement Brexit until May 22, the UK is not available. Now the country must either leave the EU on April 12 or request another delay. The second option is basic. But the timing of the delay - an indefinite value. As we warned it could be a year.

However, you should not relax this week. May may still “push” the vote, early parliamentary elections are possible, May’s resignation and much more is possible. So you should be “careful” with the pound.

Very volatile in recent days in pairs with Turkish lira. This time the outcome was the results of the municipal elections in Turkey. Erdogan and his coalition were defeated in elections in 40 out of 81 polling stations (previously controlled by 49 municipalities), and he has lost Ankara and Istanbul. The central bank of Turkey, meanwhile, literally “burns” its foreign exchange reserves to stabilize the lira. According to data published on Friday, Turkey’s reserves have decreased by one third over the past month (!).

Yesterday’s macroeconomic statistics. The most important, perhaps, were the data on retail sales in the United States. They appeared worse than analysts' expectations and showed a decline for the month (-0.2% m / m with a forecast of + 0.2% m / m). That did not bother buyers of the dollar and it continue to strengthen. However, we recommend looking for points for selling dollar on the intraday basis.

Consumer inflation in the Eurozone came out slightly below the expectations of experts. At the same time, the PMI index in the Eurozone production sector was also worse than forecasts and below 50 (47.5, with the forecast of 47.6). So, it is clearly premature to expect monetary policy tightening by the ECB.

Oil continued its growth yesterday. It is worth noting that the first quarter of 2019 was the best for the oil market since 2002 - the asset after it rose by 32%. This once again confirms the current market sentiment. So we continue to recommend looking for points to buy an asset on the intraday basis.

In addition, we are looking for points for buying gold on the intraday basis, selling the dollar and the Russian ruble.