On Monday, trading activity will likely remain light with US markets closed for a day-off. Despite «thin» market the trading session is full of information and interesting data. Meanwhile markets focus upon two main topics today. To begin with, China economy slowed in the last quarter of 2018, bringing GDP rate down to three decades minimum. No surprise that China data turned out to be weak but what is interesting is the market reaction to the data. Markets ignored the prints and reports did not alarm any concerns nor did they cause more demand for risk protective assets as gold and JPY stayed under pressure. Just to recall that last time when we received weak china data (trade balance and import/exports) the markets reacted very volatile way and produced mini rally in gold and JPY.
Last Friday US equities displayed growth and gained more than 1.3% for the main indexes. The source of better sentiment is new reports on China and US willingness to reach the agreement on trade issue. This positive market sentiment and strong Friday equity growth might have weaken the China economy concerns. In this case, we can see the real market reaction tomorrow. One way or another, the statistics once again confirm the medium-term trend for 2019, the Chinese, and at the same time, the world economy is slowing down.
Other important news, which is of strategic importance is news from the UK regarding Brexit. Today, according to the deadlines, the British Prime Minister will announce an additional action plan for leaving the UK from the EU. Of course, we do not expect that this plan will be approved today, most likely the parliamentarians will make some changes and after that the date of the final vote will be set. It is interesting that there are two months left before UK leaves EU, however, there is still no solution to how this will go. The more interesting in this respect is the development of GBP / USD pair. Last Thursday, GBP / USD broke through an important strategic resistance zone - 1.2770-1.2810, and now this area acts as a strong market support.
To other FX market instruments. The US dollar continues to moderate growth despite reduced trading volumes. The dollar index overcomes the level of 96 points, the strategic mark for the dollar index, EUR / USD is also under pressure in the area of monthly lows of 1.1360. Gold is traded around the first support zone 1280.
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