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US Open – Trade War Impact, Brexit relief, OPEC, and Gold

US stocks are looking at modest higher as increased stimulus bets are likely following last week’s softer than expected non-farm payroll release and dismal Chinese data. 

Further easing bets by the PBOC are skyrocketing as the US-China trade war continues to weigh on China’s economy.  August Chinese trade data showed exports posted a surprise drop, which suggests exporters are not front-loading sales.  The data will start looking like a trainwreck when the 15% and 30% tariffs take effect.  The trade war is at a critical juncture where Beijing will need to decide if they want to deliver more stimulus to accommodate a slowing economy or should they first focus on delivering enough concessions to the Trump administration to support a de-escalation of the recent round of tariff threats.    


The British pound reversed earlier losses after UK PM Boris Johnson reportedly signaled to cabinet ministers the government would have to accept a further three-month delay to Brexit if the courts forced him.  Johnson still may try to sabotage any extension, but for now, sterling is continue to stabilize here. 


Khalid al-Falih appears to have fallen out of place with the kingdom, perhaps its primarily with how low oil prices have been despite all the Saudi-led production cuts.  Al-Falih will be replaced as the Saudi energy minister, a signal that we could see a possible shift in strategy at the September 12th OPEC+ strategy meeting in Abu Dhabi.  His replacement, industry veteran Prince Abdulaziz bin Salman is seen as very capable to maintaining all the relationships, especially the one Al-Falih brokered with Russian energy minister Novak.  Last week Al-Falih was removed at Chariman of Saudi Aramco. 

The new energy minister, Abdulaziz is half-brother to the Crown Prince Mohammed bin Salman.  We could see this move suggest will see more pressure from the Saudis for OPEC + to stabilize prices with further cuts. 


Gold prices are slightly higher as demand for safe-havens have tentatively eased up.  It seems gold will continue to rise with massive stimulus measures that will stem from bad news with the global economy.  Gold could struggle this week if we don’t see a clear path for lower rates and the expansion of bond purchases by the ECB.  With many of the ECB hawks becoming vocal, a sign that could mean they are ready to concede on Thursday, we could see this rate decision deliver a strong dovish message that will include steps for QE2. 

Gold’s bullish trend has had many pullbacks and the current one might not be over with.  Today’s move higher is hardly a rally and could fizzle out.  Key support for gold remains the $1,470 to $1,500 zone. 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya [4]

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 TradeTheNews.com, 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