Friday August 16th, 2019

Recession concerns remain, but risk sentiment eased as investors focused on US presidents comments about “productive” trade talks with China and a likely meeting in September. China also hinted plans to spur economic growth and boost disposable income by 2020. Investors responded to the positive sentiment by unwinding of safe-haven Yen and Chf, causing US$ index to test recent highs. Concern remains over China’s response to the Hong Kong protests which could impact trade talks going forward. Watch for Michigan Consumer Sentiment Index data at 2pm EST.

Oil prices rallied 2% boosted from yesterdays positive US retail sales data and growing positive Sino/US trade sentiment. The firmer oil prices gave a boost to C$ which retraced from its recent lows vs US$. Intraday we expect C$ to remain within its current range, bias remains to buy US$ on dips.

Euro remains under pressure due to weak European growth data, recession concerns which saw Eur hit two-week lows vs US$. Positive comments on trade and possible China stimulus should have a positive knock on effect to Euro. Eur low of Aug1st remains key support, expect Euro to stabilize today and hold current range.

GBP rally vs USD on a combination of stronger than expected retails sales yesterday and comments that opposition party launching its plans to block a no-deal Brexit. GBP is finishing the week at near 2 month highs vs US$, but markets will remain cautious as political uncertainty remain.