Amplify Trading Global Markets Review - 7th November 2019

Amplify Trading Global Markets Review - 7th November 2019

Today's Highlights

  • China says it has agreed in principle tariffs cuts with US

  • Bank of England surprises as two officials back rate cut

  • UK Parties clash over economic plans

Macro Review

Interesting day in the market with sizeable moves across the pond. Equity market opened higher after China said to agree to rollback pending tariffs with the US. The early positive headline continued to add pressure on safe havens after a week of heavy losses due to optimism on a phase 1 trade resolution between the US and China. However, the recent silence from US trade officials and President Trump on the matter leaves market participants  on hold. Given the recent out performance in US indices and the return of low volatility, market looks comfortable with the idea that both sides are now willing to agree on terms to resolve at least for now the first part of the trade deal. Just a reminder, US officials have recently pointed out to the to the upcoming agreement as the first part of a "three-phase deal". As recent developments point out to a lesser risk of escalation in US-China trade tensions, it surely opens to more room for disappointment in the short term in case of disagreement from US trade officials on the recent Chinese request.

Looking over the UK today the BOE surprised expectation as two dovish dissenters voted to cut interest rates today against market expectations of a 9-0 vote split. Despite an initial pop lower, cable remains stable above 1.28. The bank shift closer to other central banks which have already cut interest rate this year adopting a FED-like insurance cut in their rate guidance. However, Carney said that the forecast for next year are conditional to the current UK Government deal. Cable remains elevated and contained by the 1.28 and 1.30 range with good chance of consolidating in the rundown to the December General election

EU Close

If you missed the morning briefing from the desk click HERE

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