Week Ahead: Traders to Focus on Trade, Crude Oil, and Brexit

This week, investors may focus on
a number of things. First, they will focus on trade as the March 1 deadline
nears. The deadline was set in December during the G20 meeting in Argentina. In
the statement, Donald Trump said that the country would increase the tariffs
for Chinese goods to 25%. These tariffs may hit goods worth more than $200
billion. With the deadline nearing, there are concerns that there will be no
major concessions. Reports by Bloomberg said that the two countries are still
too far on making a deal. This is because China has rejected measures to
radically change its economy by insisting on increased purchases from the US in
a bid to end the deficits. US negotiators have rejected this, saying that it is
unrealistic. This means that a deal will likely not be reached before the March
deadline.

On a positive side, Donald Trump
has said that he will be ready to extend the deadline by another 60 days. This
will usher in another extended period of uncertainty between the two countries.
On a positive side, the two leaders are under pressure to do a deal. Donald
Trump is facing a re-election in 2020 while China’s Xi is facing a slowing
economy. China is also seeing many manufacturers flee to other countries like
Bangladesh and Vietnam.

Investors will also focus on
Brexit. As the March 29^th deadline nears, investors are growing
cautious that a no-deal Brexit is a possibility. Last week, it was revealed
that Theresa May was committed to table her bill immediately before the March
29 deadline. The goal is to let the MPs vote for a no-deal Brexit or the deal
that she has negotiated. This will likely force even the liberals to vote for
the deal because very few MPs want to leave without a deal. They don’t want to
do this because of the implications to the economy. Already, a number of
companies such as Airbus and Land Rover have announced their plans to leave the
UK if a no-deal Brexit happens.

On data, it will be a relatively
slow week. This is because very few economic numbers are scheduled to be
released this week. Today, it will be a national holiday in the US and Canada.
Tomorrow, the Reserve Bank of New Zealand will release its minutes for the
meeting that happened a week ago. Sweden will release its inflation numbers
while the UK is expected to release the earnings numbers for January. Germany
will release the ZEW economic sentiment numbers too. On Wednesday, Japan will
release its trade numbers while the Fed will release the FOMC minutes for the
past meeting. On Thursday, Australia will release the jobs numbers while
Germany will release the manufacturing PMI numbers. The ECB will also release
the minutes for the past meeting. The US will release the durable goods orders.
On Friday, Germany will release the second reading of the GDP numbers while the
EU will release the inflation numbers.

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