Risk on morning as bond yields stabilize

Brexit – May fights to the end

Stocks – Yields rise driving stocks higher

Trump – Wants courts to abolish Obamacare

Oil – benefits on risk-on move; inventories seen falling by 1.2M barrels

Gold – stock rally triggers profit taking


Parliament took control over the Brexit process, but if they can’t agree on anything, PM May could get another chance to push her deal through.  Yesterday’s late 329-302 defeat in the House of commons set up Parliament’s chance on Wednesday to vote on anything, including a second referendum, staying in the customs union, or even cancelling a Brexit.  The risk of a no-deal Brexit still exists, but financial markets appear to believe that as the least likely outcome.  Today, MPs will decide what alternative Brexit options they want to suggest for tomorrow’s indicative votes.

PM May did receive some good news after Brexit hardliner Jacob Rees-Mogg noted he is willing to support her deal.  After consecutive humiliating defeats, if PM May does get a third meaningful vote, she may stand a chance of getting this divorce agreement finally pushed through.


US equities are poised to open sharply higher as global bond yields stabilized.  Today’s rebound is supporting the growing belief that this yield curve inversion is not a definitive sign a recession is coming and more importantly that the current economic cycle is not over.  The key spread between the 10-year and 2-year Treasuries widened to 15.8 basis points.

Today, housing data came in softer than expected, confirming weakness with the housing market. Housing starts for February came in at 1.162 million, missing the analysts’ consensus of 1.3 million and lower than the prior 1.27 million reading.


Fresh off his victory of Mueller not finding enough evidence of collusion with Russia, President Trump is trying to have courts abolish Obamacare.  A controversial move, that has the potential of removing healthcare from millions of Americans.  Trump is claiming the Affordable Care Act (ACA) is unconstitutional, this may be more of a campaigning angle he will take to appease his base, but he could lose votes as many senior citizens are rely on ACA to save money on Medicare.


Crude prices rose sharply, benefitting from the last night’s risk-on rally.  Last week, West Texas Intermediate crude plunged after inventories plunged by almost 10 million barrels.  This week, we could see inventories draw 1.9 million barrels.

Oil prices are supported by the OPEC + production cuts, but once we see the next wave of the US shale revolution, we could see OPEC lose some relevance.   Current expectations are for US crude exports to rise to a  record 5 million barrels by late 2020, a near 70% jump from current levels.


The precious metal pulled back as investors used the positive trading environment to lock in some profits.  While gold has been stuck in a very wide trading range over the past few years, we could see the dovish stances delivered by the Fed and the ECB keep the metal making a push for those upper boundaries.



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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. 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. Prior to OANDA 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, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.