Baku, Azerbaijan, April 16
By Anvar Mammadov – Trend:
The week ahead will be nervy for the global financial market, Head of FX Strategy / Saxo Bank John Hardy told Trend April 16.
“The US and its allies’ missile attacks on Syria were the headline event over the weekend, with the strong feeling that these were a kind of one-off,“checkbox” attack (red lines were crossed, missiles must be delivered) without any apparent intent to extend the campaign against the Syrian government,” he said. “But the rhetorical exchanges between Russia and the West are not in the least comforting, nor is China’s weighing in on the matter and siding with Russia, which certainly widens the potential fallout from here. We are meant to expect further sanctions today from the US side against Russian companies dealing with Syria, and the ruble remains on its back foot at the moment. This issue will not go away now or in the near future.”
Hardy added that there should be plenty of focus on sterling this week, after its ambitious break below the long-standing range versus the euro last week.
“Post-Brexit trade negotiations are meant to get underway this week and headlines linked to the process could accelerate (more likely?) or reject the move,” he said. “As well, a couple of key UK data points are up this week, including the latest CPI data up Wednesday and earnings/employment and retail sales data to follow on Thursday.”
“Elsewhere, we have interesting US data already up today – US March retail sales – and a whole string of voting Fed speakers out speaking all week, so the US yield curve ought to have more cause for showing a bit of volatility,” Hardy said. “Finally, corporate earnings season is swinging into full gear this week after nervous churning in the equity market that has failed to sustain any directional move for more than a day at a time lately.”