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- Next week’s focus falls on… Trump, Brexit, Facebook
Next week's focus falls on... Trump, Brexit, Facebook
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Loading...In the new week the focus will again fall on .. Donald Trump. He has imposed import tariffs worth $ 60 billion on imported goods from China, mainly for those who benefit from theft of intellectual property. The new measures are designed to punish China for their commercial practices, which, according to the Trump administration, include the theft of intellectual property from US companies. They will focus mainly on certain products in the technology sector where China has an advantage over the US - most likely speaking about Chinese mobile phones that are taking an increasing share of the US market. In the new week, market participants will be watching with caution for news related to the names of these companies, although the administration has announced a 15-day deadline for publication. After it, a 30-day term will be in which Trump expects the companies in question to offer a fair deal. Otherwise, the tariffs come into full force. The indices once again plunged into a correctional territory, with China's counter-response that it would hit over 128 U.S. products sent investors in fears. The Chinese government has not yet named the names of the companies, but it can be expected with certainty that the technology sector will suffer the most if the trade war escalates. Investors from all over the world will be tracking headlines in the new week, with stocks remaining over-sensitive on the subject. Expectations are that the negative sentiment will remain above the market, as the preconditions for these trade conflicts to subsist are minimal.
Remaining on the technology front, media giant Facebook Inc. is faced with an intensifying crisis that has plunged all technological stocks. The question that concerns the public and investors is whether the company has managed to stop unauthorized access to and processing of consumer data, the inspection that led the company's share price to the biggest decline in the last four years. Facebook shares lost more than 10 percent of its value last week, and even CEO Mark Zuckerberg failed to calm investors. In the new week we are expecting the outcome of these events, with market participants clearly showing that the use of personal data and information is not tolerated.
The political and trade uncertainties that have sent the shares back into the correctional territory become a strong support for gold. Investors have invested a total of $ 617 million in the two largest gold-trading funds. The threat of trade war further stimulates the purchase of assets known as safe havens. Investments in these funds peaked at almost a five-year period despite the fact that the Fed raised interest rates. Expectations are that in the new week the precious metal will continue to rise.
Another important topic that traders will follow in the new week is the Brexit talks. So far, it has become clear that Britain will remain in the EU by the end of 2020, but with limited rights. The EU and the UK agreed on a transitional period of 21 months - from 29 March 2019 to the end of 2020 - before leaving the bloc completely. Every time, however, when the headlines about Brexit are positive, it seems that we have to wait a little while before everything changes. Despite the good news of the transition period and of the understanding between the two countries, one big obstacle stands in the way of Theresa May - the border with Ireland. According to Michel Barnier, this topic is extremely important and no consensus will be made. The United Kingdom agreed to insert a decision to "backstop" solution for the Irish border in the legal text that will outline all the details of the separation. But for now there is no compromise on how this solution will look. The EU has proposed Northern Ireland to continue to follow EU rules, even if it means isolation from England. But the UK did not agree with that. According to Barnier, this agreement will only apply if no other solutions are found. The pound has been on the rise for the past week because of the progress of the talks, but even a small hurdle from here can erase all profits. Traders remain cautious and do not allow themselves to be too bullish without having absolutely strong arguments for that.
The most important economic news, that will drive the markets next week:
Monday
10:30 UK - Gross Mortgage Approvals
19:20 USA - FOMC's Member Dudley Speaks
22:30 USA - FOMC's Member Mester Speaks
Tuesday
02:00 Australia - HIA New Home Sales
16:00 USA - Consumer Confidence
Wednesday
02:00 New Zealand - ANZ Business Confidence
09:00 Germany - Gfk Consumer Climate
14:30 USA - Gross Domestic Product
16:00 USA - Pending Home Sales
16:30 USA - Crude Oil Inventories
Thursday
01:50 Japan - Retail Sales
02:30 Australia - Private Sector Credit
10:00 Germany - Unemployment Rate
10:30 UK - Gross Domestic Product
14:00 Germany - CPI
14:30 USA - Initial Jobless Claims
14:30 Canada - CPI
Friday
01:30 Japan - Tokyo Core CPI
01:50 Japan - Industrial Production
Trader Aleksandar Kumanov Read more:
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