Next week's trader's playbook 12.08 - 16.08.2019

We have witnessed a rather dynamic week. Day after day, there was an alternation of risk on - risk off because of the trade war and the rhetoric of Trump. The answers from the Chinese side also did not lag behind in weight and importance. We understand how a small devaluation of the Chinese yuan turns entire markets and eliminates the risk of appetite. So far, it can be seen who is trying to bluff and threaten and really who can respond with something different and serious with just one tariff. Market liquidity is slightly lower this month, but markets lack volatility, which makes them so dangerous at this time of year.

We expect a new dose of action next week because Trump is threatening to cancel trade talks in September, in addition to tariffs. The sentiment will once again move precisely around the speeches from Washington and Beijing, with the US dollar's strength on the agenda, "whether to devalue Trump or not?" and whether a global currency war could be avoided globally. With September approaching, investors are still reminded of the Federal Reserve, which is expected to cut interest rates again by 25 points next month. In the face of "harassment" against China, Trump also fails to remind Powell that interest rates are too high. We are watching a politician demolish and raise entire markets with just one speech, and that is on social networks. Markets based on stability, integrity and justification for the stability of the US economy. Well, reality speaks for itself.

On the Brexit front, although Parliament is on vacation, Johnson's struggles at local and European level are going full steam. The UK economy is already reflecting the negative effects of unauthorized Brexit, shrinking for the first time since 2012. The Old Continent and its markets are now facing another (known) challenge. The snap parliamentary elections in Italy. Today, Salvini called for this to happen because of the inability of the government to resolve its debt problem and to meet the government's expectations. In addition to the stock market, the debt market in Europe has taken a new hit today following Italian news. Given the rising political and economic uncertainty in the Eurozone, can we again raise the question of whether the ECB will resort to QE?

What next week? A quiet Monday - at least in terms of the economic calendar. Tuesday's pace slows with German CPI data in the morning, followed by UK labor market data. The German machine will once again be able to refute its weakening data on ZEW conditions, followed by ZEW sentiment in the Eurozone. The states follow with inflation figures. On Wednesday, the Chinese will be in focus during the Asian session. Industrial production will be key. GDP for Germany follows before the start of Europe, followed by inflation data in the UK and GDP for the euro area. Oil investors will have to look around for US oil in the afternoon. Thursday we will look forward to Australia's labor market data during the Asian session. Morning - UK and retail. The state session will also bring us retail sales data and applications for aid and Philadelphia production indices. Friday's calendar will be a little more relaxed as the important economic data we will need to monitor then are US building permits and Michigan consumer expectations.

Reports to come next week. Wednesday - Cisco and Macy's. Thursday - NVIDIA and Walmart.

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