All about trade, dollar and stocks continue move higher

USD – Dollar rally continues as optimism grows on trade front

Shutdown- Likely to go down to the wire again

Gold – Sinks on strong dollar and upbeat trade talks

Oil – Supply worries are building, WTI $50 level at risk

Apple – Huawei continues to take market share in China


The dollar continues to ascend as global bond yields rise and optimism grows that we will see positive steps this week with the China and US trade negotiations, potentially leading up to a meeting in mid-March with Trump and Xi.  With the exception of Wednesday’s US inflation reading, economic data is fairly light and the focus will remain on political developments with trade and government funding.


Over the weekend, talks fell apart between Democrats and Republicans on border security, potentially signaling we could see another shutdown if no agreement passed by the February 15th deadline.  The roadblock to a deal remains the level of funding for border barriers, funding increases for facilities and personnel.  The President could be forced to accept funding that comes well below his $5.7 billion demand in order to avoid further political damage for another government shutdown.


The precious metal declined as the strong dollar sank commodities across the board.  Gold has been on a tear recently, rising for a fourth consecutive month, but has appears to have seen some profit-taking after failing to rise above $1,335.  The yellow metal appears to have some key support from China, the PBOC raised their holdings for a second consecutive month, this follows a 2-year break from any changes.  Uncertainty on how the trade war will unfold and concerns over China’s credit markets could remain key catalysts for Chinese gold purchases.  Overnight, two Chinese borrowers reportedly miss two bond payments, a sign Chinese credit markets are sensitive and will likely need further efforts from the Chinese government to support it.


West Texas Intermediate crude trades lower on the strong dollar and global growth concerns, but the next wave of selling could come from oversupply concerns when we see the OPEC monthly report tomorrow, the IEA report will come the day after.  Concerns of trade talks falling apart between the US and China will likely remain short-term risks for oil, but the worries of oversupply stemming from the US will likely remain a dominant theme as we approach the warmer months.  Last month, Saudi Arabia overdelivered on their production cuts, but that is not likely to be continuing trend for them.  Compliance will closely be watched from the OPEC + group and, despite Venezuelan crude’s expected decline, we could see oil decline if other members fail to hold up their end of cuts.


According to research firm IDC, Apple reportedly lost 19.9% in iPhone shipments in China, while Huawei saw 23.3% gain.  Apple moved up one spot to fourth place, passing Xiamoi, but still behind Huawei, Oppo, and Vivo, respectively.  Apple price cuts are heavily expected in China, but they may not see significant improvement in sales as authorized retailers have already begun offering discounts.

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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya