ALPHA Market Update 21 January 2019


Market Update




United States

  • The Second US-North Korea leadership meeting is scheduled to be held in late February
  • According to the media, Starbucks founder and Democrat Schultz may participate in the general election as an independent candidate. But this may further distract the Democratic votes and help Trump win re-election. At present, dozens of Democrats have announced or expressed their intention to participate in the general election.
  • Trump’s shifting position: using illegal immigrants to change wall money; It is said that Senate vote within a week

United Kingdom

  • Today is MLK day in the US so there is limited liquidity; however this means that the UK news is the most significant for the GBPUSD pair.
  • Today TM will address parliament and update them on her Brexit Plan B which will be voted on next week (nothing significant expected to change), but we should hope for some clarity as to what the next step is. As yet, there is little chance of a cross party solution without a more solid solution to the Irish border problem. According to cabinet ministers, an extension of A50 “has not been discussed”. This is to try to encourage MPs to back her deal with some amendments


  • France and Germany are to sign a new treaty on Tuesday aimed at breathing new life into their place at the centre of the European Union. As the UK moves to leave the EU and a rising tide of populism challenges the core liberal values of the bloc, the new treaty commits wholeheartedly to defending it. There is rich symbolism in the signing in the German city of Aachen, which has changed hands over the centuries and is known in French as Aix-la-Chapelle. In the draft, France and Germany agree to establish common positions and issue joint statements on major EU issues – formalising their existing co-operation. They also plan to act as a joint force at the United Nations. From foreign policy to internal and external security, the two nations commit to coming up with common positions while seeking to bolster “Europe’s capacity to act autonomously”.


  • The USD/JPY pair traded with a mild negative bias at the start of a new trading week and eroded a part of Friday’s goodish up-move to monthly tops.
  • The pair failed to capitalize on last week’s positive momentum to the 110.00 neighbourhood and also shrugged off growing optimism over US-China trade talks, with bears taking cues from the latest data that showed the world’s second-biggest economy slowing further in the last quarter of 2018.
  • Despite the softer data, the prevailing risk-on mood was seen denting the Japanese Yen’s safe-haven status, which coupled with a follow-through pickup in the US Treasury bond yields, though did little to provide any meaningful boost to the US Dollar and seemed to be the only factor that helped limit deeper losses.

Australia & New Zealand

  • AUD has slightly weakened as concerns about the domestic and Chinese economies resurfaced, drawing attention away from progress in talks between Washington and Beijing while threatening to scupper the Antipodean’s nascent recovery.
  • Chinese GDP growth fell to 6.4% during the final quarter of 2018 according to data released Monday, from 6.5% previously, marking a third consecutive decline and the slowest pace of expansion for more than a decade.
  • Other figures showed industrial production, fixed asset investment and retail sales growth all stabilising during December, which economists atrribute to government stimulus measures aimed at propping up the economy, but the Chinese data still makes grim reading for analysts.
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