Themes for the week and best looking opportunities
– ECB measures to keep a positive tone in EU equities and credit markets.
– Chinese data might spark another round of risk-aversion after disappointing retail sales and industrial production on Saturday. PBoC Governor Zhou might balance the bad news however, after saying that the PBoC will maintain a prudent monetary policy and that the Yuan is getting back to normal.
– FOMC (Wed) to stand pat. Retail Sales (Tue) will build up expectations for the event. To note, recent US data has been buoyant and gives Yellen excuses to keep a positive tone during her Presser. This is without a doubt the main event of the week even though a rate hike is not likely.
– UK Chancellor George Osborne (Wed) to deliver Budget Statement amidst softer economic conditions. On the same day we will also get the Labour Market report, which is however expected to show moderate growth in both employment and wages. Then we have the BoE (Thu) which will certainly leave rates unchanged, but should acknowledge the recent drop in economic activity.
– Bank of Japan (Tue) and Swiss National Bank (Thu) are expected to keep rates unchanged at -0.1% and -0.75%, respectively.
– OPEC Monthly Report (Mon) will also be worth watching since the IEA has recently said “prices may have bottomed out” and an output freeze is still in the cards.
Going into the week I continue to privilege Long Aud and Cad positions vs. Jpy, Gbp and Usd.
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