News & Analysis

Week Ahead -The Looming Deadlines

February 25, 2019

By Deepta Bolaky

Market Overview

Investors had much information to digest across the week, but towards the end of the week, they hung on to signs of trade progress that kept the risk sentiment afloat. The equity markets were mostly in the green for the week even though in some cases, the weekly advance was not impressive. In the FX markets, the US dollar regained some ground but was mixed against major currencies. The percentage gains were mostly contained below 1%.

Week Ahead – The Looming Deadlines

Deadlines Extension?

Geopolitics are high on the agenda this week. Alongside the US-North Korea Summit this Wednesday and Thursday, the looming deadline for Brexit and trade tariffs may set an optimistic but cautious tone. The last few days have progressed with more information about probable extensions to the self-imposed deadlines.

  • Brexit Vote

With a relatively subdued Monday, markets participants will be gearing up for the Brexit updates as from Tuesday with the UK Prime Minister Theresa May’s speech. She is expected to deliver a speech focusing on the negotiations for Brexit ahead of the UK Parliamentary vote on Wednesday. The UK Parliament will decide whether Theresa May’s Brexit Plan is valid or not. In the case the Parliament does not approve it, chances of a had Brexit will increase.

In addition to Brexit news which will likely bring more volatility in the Pound, the following events scheduled across the week will be important for Sterling traders:

  • Monday: BoE’s Governor Carney Speech
  • Tuesday: Inflation Report Hearings
  • Wednesday: Gfk Consumer Confidence
  • Friday: Markit Manufacturing PMI

As the clock ticks down to the Brexit day, the weaker sentiment towards the local currency might accentuate while bulls will probably eye any possibilities or further clues on an extension.

  • US-China Trade

 There were more positive headlines coming out from Washington and Beijing recently. Hopes of a trade deal have risen with more trade talks between both parties which showed that there is a willingness to find a solution. The trade negotiations were extended into the weekend and investors will be looking for updates on Monday.

Will the March 01 deadline be extended?

 At this stage, there are only hints from the US President that the deadline may be extended if there is substantial progress. The start of the week will be geared towards the updates on the trade negotiations.

Equity markets have recouped much of late-2018 decline; however, any setback from the trade negotiations could trigger a sell-off as the rally in risk assets were mostly based on possibilities of a trade deal. Similarly, in the currency’s market, any bearish news will force investors to seek safety to safe-havens like the Japanese Yen and the US Dollar.

An Overload of US data

It will be a busy week for the US on the economic calendar front. The Federal Reserve is patiently on hold given the current headwinds in the financial markets and slowing growth. This week’s data will help to gauge whether the economic dynamics will change the stance of the Fed. Aside from a few speeches across the week, investors will have more insights on the housing sector on Tuesday. We will also see the figures for the Consumer Confidence which is expected to increase. Durable goods and Pending Home Sales will be released on Wednesday.

Thursday will be the highlight with the GDP report. Investors will be interested to see how much the world’s largest economy has slowed.

We will see more top-tier data on Friday. Core PCE, a significant indicator of inflation will be out together with Personal Income/Spending, Manufacturing PMI and Consumer Sentiment Index.

Chinese Data

Amid a lack of top-tier economic data for Australia and New Zealand, the Chinese data will stand out. The Aussie dollar was under pressure following the news of China’s coal ban. Traders will be watching the NBS and Caixin Manufacturing PMI on Thursday and Friday respectively.

The manufacturing sector has contracted since December as the reading dropped below 50. We expect the reading to remain below 50 but steady or slightly higher. Any significant contraction could spark fears.

Economic data

  • Japan: Industrial Production, Retail trade and CPI figures will be released on Thursday and Friday respectively. The focus will remain on the global downturn, and the indicators will provide guidance to the global slowdown narrative.
  • Eurozone: The CPI will be the highlight. However, we will also see the unemployment and PMI reports in Germany as well.


Oil markets are finding support on trade optimism and bullish oil reports. We expect oil prices to continue relying on the weekly oil reports for support and direction.

Gold has rallied last week and had the longest weekly winning streak since 2016. The yellow retreated and steadied in the $1,330 region. This week, geopolitics will be the critical driver for XAUUSD.


Tuesday, 26 Feb 2019
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
8.34 0 0.032 0.019 0 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 0 0 0 15.248 0