Balance, G7 and Jackson Hole outcome, problems of Germany

2019년 8월 27일

Trump: China is ready to go back to the negotiating table. China, for its part, reiterated its desire to resolve trade problems through negotiations. safe-haven assets against this background have slightly adjusted and provided excellent opportunities. Despite the optimistic comments from Trump’s side as well as Chinese, everything might change. We have recently observed something similar and buying safe-haven assets tactics on the descents over the past few weeks was the right decision. So our recommendation is to buy gold and the Japanese yen. The only thing, given the increased volatility, do not forget to set stops - it is better to re-enter.

The G7 meeting results can be called insignificant. We did not hear any revolutionary statements. So we believe that this event is already “played out” and taken into account.

As for the Jackson Hole symposium outcome, there was a lot of concern, but representatives of the Central Banks have stated that crisis and cyclical issues need to be solved not only by monetary methods but also by fiscal ones.

Returning to Powell’s speech on Friday, he did not say anything fundamentally new and did not clarify the current state of affairs. Nevertheless, our position on the dollar is unchanged - we are looking for points for its sales.

As for the euro. Data on the business climate in the largest economy of the Eurozone (Germany) again frankly disappointed. The IFO business climate index in August came out worse than expected 94.3 with a forecast of 95.1. This is the minimum value for the last 7 years. Therefore, markets expectations as for the monetary policy easing only intensified. So it’s better to wait a while with euro purchases. But its sales against the pound or the Japanese yen look like good trading ideas.