US GDP growth, Trump called to OPEC and a hard week ahead

29 Apr 2019

Last week was marked by a significant strengthening of the dollar growth. We noted that one of the reasons was the expectation of good data on US GDP last Friday. Preliminary data for the first quarter appeared much higher than analysts' forecasts: + 3.2% y / y, when the forecast was expected as + 2.3%. But the most interesting thing that happened after the publication of this data was that the dollar has undergone a fairly massive sales on all fronts.
In high rates of GDP growth, analysts noted the risk of a future recession in the United States. The fact is that the first quarter growth in 2019, the US GDP is bound to increase stocks and exports. While consumer demand showed a rather weak trend. This was confirmed by the inflationary component of GDP, which grew by only 0.9% after rising by 1.7% in the previous quarter.
In addition, experts are very alerted by such an indicator as final sales of products to national buyers. This figure is falling for the second quarter in a row and shows that the effect of Trump's tax incentives has ended. Thus, the situation with demand in the country is deteriorating. Recall that 2/3 of US GDP is directly or indirectly related to the consumer sector. So, it seems like the dollar buyers shouldn't just be excited. Our position remains unchanged so far - we believe that the dollar is too expensive, and we will continue to look for points for its sales: both in the medium term and on the intraday basis.
Another significant event on Friday was sales in the oil market. The asset literally was covered with the panic wave, which provoked a sharp decline in the cost of oil. The reason was Trump's call to OPEC, in which the President of the United States told the cartel to lower oil prices. We are rather sceptical about the information about Trump's call, but such massive profit-taking out of the blue suggests that the market is ripe for a correction.
Especially when you consider that the number of active oil installations in the United States for the week decreased by 20 units (!) To 805 units, which is the minimum value in 2019 (that confirms the current weakness and vulnerability of bulls). In this regard, this week we decided to roll over into oil sales. And today we will look for points for the sale of an asset within the day.
Talking about the upcoming week, we note that it will be very difficult for trading - too much important information. We want to note Eurozone GDP data that will be published on Tuesday, the Fed's decision on the parameters of monetary policy on Wednesday, the announcement of the results of the Bank of England meeting on Thursday, and statistics on the US labor market will complete a difficult week.
As for our other positions, today we are continuing to look for points for the dollar sales against the euro, pound, as well as the Australian and Canadian dollars. In addition, we will buy gold, as well as sell oil and the Russian ruble on the intraday basis.