News background and trading ideas for 01/11/2018

Traditionally let’s start with an overview of past events. Yesterday, data on employment in the US from ADP were published, which are traditionally interesting to the markets in the run-up to official statistics from the Ministry of Labor, which, we remind, will be released on Friday. In view of the importance of Friday's data, we will review the report from ADP in a separate review.

A marked interest from the markets also caused inflation data from the Eurozone. On an annualized basis, they came out exactly in accordance with analysts' forecasts +2.2%. If it were not the extremely weak data on Eurozone GDP, published the day before, we could call them a bullish signal for the euro (such values give the ECB grounds for tightening monetary policy). But monetary tightening amid the background of almost zero GDP growth will look very strange. So we would not hurry to buy euros.

It is worth admitting quite the good statistics on the GDP of Canada (the growth turned out higher than expected). However, that is hardly helped the Canadian dollar against American one. The reason is the strength of the American dollar rather than the weakness of the Canadian one.

If we are anything to buy, from our point of view, it is the British pound. Dominic Raab, the Minister for Great Britain exit from the European Union, stated yesterday that the United Kingdom and the EU could conclude an agreement on Brexit on November 21. Actually, this is a direct confirmation of our medium-term idea, which we have been voicing for more than a week. Today can also give a cause to buy a pound. This time it is not about news from the fields of Brexit, but about the results of the meeting of the Bank of England, which will be announced this afternoon. However, there is no special intrigue in the results themselves - the rate will almost certainly be left unchanged. All markets will focus on the economic forecasts of the Central Bank, as well as its vision of the current situation. If the Bank of England is optimistic enough, the pound has good chances for growth. Moreover, technically points for the start of growth seem almost perfect. So we continue to recommend buying pounds.

The panic in the US stock market has somehow settled, what is provoked continuation of gold purchases. Nevertheless, the gold is still above 1200, we consider the asset is worth to buy.

Other our trading ideas remain unchanged - selling the oil (our motivation in details is in a separate review) and Russian ruble either. Moreover, today we are looking for points for dollar’s purchases, first of all against the Japanese yen.