What to expect next week - 14.01 - 18.01.2019?

It was another week full of nerves, uncertainty and drama. The year starts "naughty", but that's not a guarantee that it will be the same and the mood throughout the year. The indexes were again under bearish pressure during the week, the dollar, the yen, and the gold were booming after investors had no choice but to reassert them as a safe heaven. Oil started the year positive. The announced OPEC actions in December 2018 will soon begin to materialize in a steady rise in oil prices. Or at least that's the plan. Fears of the slowdown in the global economy continued to harass investors this week, but optimism is hopeful, and it is beginning to break the darkness, motivated by the positive expectations of the "happy ending" of the US-China trade conflict. At the end of the week the FX markets were hit by a flash crash, which led to a strong yen appreciation. Powell finished the series with his dovish comments Friday that the Fed will be patient with the economy, hinting that they may slow down the pace of interest rates, and that they will closely monitor the labor market and the change in inflation. Of course, they will be fully prepared to react adequately in the face of any economic change. The US government is still partially closed.

What to expect next week? By preserving risk on sentiment - weak dollar, gold and yen, strong stocks, indices, growth in the euro. The week will be filled with a lot of macroeconomic indicators and speeches from central banks. Growth in oil is also expected to remain. Investors will try to maintain a good pace. Their focus now shifted to the Fed and the real opportunity, Powell finally listened to the markets, something Trump reflected as a negative comment to the President of the Central Bank. The sentiment will now move from assessing this opportunity. US indices have already begun, Monday Asia and Europe will have to catch up, which will only lead to a rise in the prices of major indices. Against this backdrop, Apple, China, Brexit, the world economy, the US government, political uncertainty in Europe and the trade war will remain slightly backward. Growth is so fragile that investors will grab each of them even small positive news to support it. For months there was no such catalyst. Perhaps Powell has become the primary catalyst? Even if it is not, even sentiment is temporary, markets need this vent and they will benefit from making a rally. But the growth is so fragile, do not let it go wrong.

Photo: Unsplash

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