News background and trading ideas for 10/09/2018

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As we mentioned the Friday data on the NFP is unlikely to cause severe damage to the dollar. Actually, the whole reaction ended on Friday. The dollar already grew on Monday, pushing off from the support of 95.60 on the Dollar Index.
Since Monday was a relatively calm day due to holidays in Japan, the USA and Canada, there were no global changes in the basic background. But at some points, we still would like to pay attention.
First of all, we are talking about another round of sales in emerging markets particularly in China. As a consequence, both the capital market of the Celestial Empire and the Chinese yuan, which reached the lowest points in the last six months, were falling. The fear index VIX is 5.87% also in local maxima, so trading should be more cautious than usual. Panic wave at any time may increase.

Italy drags down European markets - continues to disturb Europe’s tranquility. We have already noted their footages to increase the budget deficit, statements about the feasibility of the euro refusal. Among the latest "achievements" of Italian populism, it is worth noting the announcement by the Vice-Prime Minister of Italy Matteo Salvini, who called the Europeans bureaucrats and enemies of Europe. We would like to remind once again that we don’t see a real threat from the populists of Italy, but they give the opportunity for euro purchases cheaper because they deviate from the equilibrium rate. So for trading, it is preferably a plus than a minus.

Referring to trading ideas, we note that the basic ones are still unchanged: we are looking for points for buying pounds, buying dollars against the Japanese yen and the Russian ruble, looking for spots for selling USDCAD, and also “selling” oil in the long term. With the yen should be more careful although, since, in conditions of investors’ heightened fear, they may actively buy Japanese currency to seek asylum.

As for the Russian ruble-oil bunch, and this is one, considering the total dependence of the Russian Federation economy on oil prices, the news that Saudi Arabia is ready to increase oil production by 1.3 million barrels per day to 12 million per day is very symptomatic. Well, "finished off" oil buyers with the news that the United States is ready to make waivers to buyers of Iranian oil. That is, the fundamental reason for the growth of oil in the last month - sanctions against Iran and a sharp decline in the supply of oil - no longer exists. So, as we have said more than once, current oil prices are just a gift for sellers, and they need to be used. Well, the ruble will fall after the fall of oil. Even despite its apparent cheapness, the ruble still needs to be sold.

From new ideas, we want to draw attention to the dynamics of gold, which has long been locked in a narrow range. In general, you should not pass by such "easy" money. We mean purchases of gold in the area of 1185 with the addition of about 1170 and sales of gold in the area of 1205. But at the same time, the breakdown of any of these boundaries will be the strongest signal for opening positions ahead.

Speaking about macroeconomic statistics for today, we mention that nothing capable of changing the current fundamental picture will be published. So, there is no threat from this side.