Coronavirus Puts Pressure on Oil, and Brexit - on the GBP (Weekly Review)

2020-02-11
Last week, investors' attention was focused on the issue of the Chinese coronavirus and its spread to other countries. In this regard, there were concerns about the slowdown in China and the global economy as a whole, and therefore profit was fixed for long positions on stock exchanges, which, however, was limited, and after news appeared about the possible finding of an anti-virus serum stock indices updated highs again.

Expectations of a decrease in Oil demand from the PRC provoked quite large-scale sales of the black gold, and the American WTI was briefly below the psychological level of 50.00 per barrel, and the North Sea Brent crude oil mixture was below $ 54.00. A fall in prices may trigger the next reduction in OPEC + production, which at this stage keeps oil from further collapse, but we should hardly expect any decision of reduction soon, so the negative mood in the market will remain.

Among main currency pairs, the GBP/USD was again the most volatile. The uncertainty surrounding the UK trade deal with the European Union after Brexit, fueled by tough rhetoric from both sides, negatively affects the GBP dynamics. Although its fall still attracts interest in the purchase, the loss of important support in the region of 1.3000-1.2960 indicates high risks of large-scale losses, and the immediate target of the bears may be the level of 1.2800. However, the GBP might surprise everyone, so bears should still be careful.

Schedule for this week:

Monday, February 10
13:15 GMT - Canada. Housing Starts;
20:15 GMT - USA. FOMC Member Patrick Harker Speaks.

Tuesday, February 11
08:00 GMT - PRC. Foreign Direct Investment (FDI);
09:30 GMT — United Kingdom. GDP;
09:30 GMT - United Kingdom. Industrial Production;
09:30 GMT - United Kingdom. Manufacturing Production;
10:00 GMT - Eurozone. Forecast of Economic Growth;
15:00 GMT - USA. Federal Reserve Chair Jerome Powell Testifies;
15:35 GMT - United Kingdom. Bank of England's Mark Carney Speaks in Parliament.

Wednesday, February 12
01:00 GMT - New Zealand. Reserve Bank of New Zealand (RBNZ) Interest Rate Decision;
01:00 GMT - New Zealand. Reserve Bank of New Zealand (RBNZ) Rate Statement;
01:00 GMT - New Zealand. Reserve Bank of New Zealand (RBNZ) Monetary Policy Report;
02:00 GMT - New Zealand. Reserve Bank of New Zealand (RBNZ) Press Conference;
10:00 GMT - Eurozone. Industrial Production;
15:00 GMT - USA. Federal Reserve Chair Jerome Powell Testifies;
19:10 GMT - New Zealand. Reserve Bank of New Zealand Governor Orr Speaks.

Thursday, February 13
00:15 GMT - Canada. Bank of Canada Governor Poloz Speaks;
00:15 GMT - Australia. Reserve Bank of Australia Governor Lowe Speaks;
07:00 GMT - Germany. Harmonised Index of Consumer Prices (HICP);
13:30 GMT - USA. Consumer Price Index (CPI).

Friday, February 14
02:00 GMT - PRC. Industrial Production;
02:00 GMT - PRC. National Bureau of Statistics (NBS) Press Conference;
07:00 GMT - Germany. GDP;
10:00 GMT - Eurozone. GDP;
13:30 GMT - USA. Retail Sales;
15:00 GMT - USA. Michigan Consumer Sentiment (Feb).

Author: Anthony Porter, IAFT Analyst

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