Results of the week, 10 years of growth in US and plan for week

10 ביוני 2019

The publication of statistics on the US labor market was the top story. We warned that the data will come out much worse than forecasts and recommended selling the dollar before the data has been published. Those of our readers who followed the advice should have earned good money. But back to the data. With the forecast of + 175K, in fact, the number of NFP was only + 75K. In addition, wage growth was below the expectations of experts.

This is definitely bad news for the dollar, which is giving the Fed a reason to lower the rate at the meeting to be held next week. In this regard, our recommendations remain unchanged this week - we will look for points for its sales.

At the same time, we cannot but note an important for the US economy anniversary - 10 years in a row of economic growth. Also, this fact is remarkable by the fact that if growth continues for another month, it will be the longest period of economic growth in the United States since 1854 (!). But there was no particular joy among analysts and investors. The aggregate GDP growth for this period has not even grown by half from the growth that was recorded in the period 1991-2001. And investors' fears that growth will stop increasing with each passing day. China, Mexico, the EU and might be Japan. The economic data is a growing concern so far, recall the statistics from ADP or the data on the Manufacturing Purchasing Managers Index from Markit, that in ay dropped to the lowest values since September 2009. As a result, analysts JPMorgan Chase & Co. increased the likelihood of a recession in the United States from 25% to 40% in the second half of 2019.

There are no major events like NFP or announcements of the results of the leading Central Banks, but there will be plenty of statistics on China (trade balance, inflation, industrial production and retail sales), Great Britain (GDP, trade balance, labor market and industrial production) and the USA (inflation, industrial production and retail sales).

As for our trading preferences, they have not changed over the week. And what's the point of changing positions that make a profit? Almost all of our recommendations for last week turned out to be a good plus. So, we will continue to look for points for the sales of the US dollar primarily against the Japanese yen, as well as the euro and the British pound, sales of oil and the Russian ruble, as well as buying of gold.