Weekly Market Wrap 30/12/2019-03/01/2020

Marius Paun | London, UK | Senior dealer | Friday, 03rd January 2020

On Monday, the US goods trade balance figures showed a surprise narrowing in the deficit. It was largely due to a fall of across the board imports, consumer goods, industrial supplies as well as capital goods. On the same positive note, US stocks closed the year on a high: Nasdaq was by far the clear winner, up over 35%, S&P rose almost 29% and Dow Jones gained over 22%.

China PMI data for December came in at 50.2 slightly better than expectations of 50.1. The main reason was export orders going back into expansion territory which last time was seen in May 2018. More good news, US President Donald Trump reiterated that he will sign the Phase 1 trade deal China on January 15 and subsequently will travel to Beijing later on to begin talks for Phase2.

In the UK, former Prime Minister Theresa May saw her attempts of delivering the exit deal blocked by the Parliament over and over again. The stalemate came to an end when an election was called and the British public sided with Boris Johnson (the only major candidate who promised to end the whole saga). The result sparked a fresh rally in the GBPUSD to over 1.35. However, there is a widespread opinion that closing a trade deal with the European Union in 2020 is going to be a serious challenge. So the pound sterling retraced to 1.31 currently.

Meanwhile EU trade commissioner Phil Hogan was quoted saying that UK Prime Minister Boris Johnson will not keep his promise of exiting the transition period by the end of 2020. Latest news PM Boris Johnson is going to meet the new European Commission President Ursula von der Leyen next Wednesday at Downing Street.

On Friday morning Reuters reported (confirmed by the US officials) that a senior Iranian general – Qassem Soleimani has been killed in an airstrike at Baghdad airport. He was seen by the Pentagon as the main target, who has recently orchestrated the attack on the US  embassy in Iraq. Iran’s spiritual leader Khamenei promised ‘severe retaliation’. As a consequence, the oil prices spiked to an eight-month high. On top of that gold has also attracted buyers and pushed above $1550.