Market Review – Fundamental Perspective 19 March 2018

European stocks start the week on the back foot, following a mixed session for Asian benchmarks overnight. JPY strength weighed on the Nikkei 225, with risk sentiment remaining fragile and support ratings for Prime Minister Abe falling to their lowest level since he took office in 2012. The USD continues its rally ahead of the FOMC rate decision this Wednesday.
Last week’s underperformer was the CAD which suffered from US protectionist rhetoric. Given that it is still not clear whether Canada (and Mexico) are exempt from the steel tariffs, CAD and MXN should remain volatile until uncertainty is removed.
In Russia, President Putin was successful in elections over the weekend. At the same time, tensions with the West continue as the UK government is said to consider further actions against Russia on the back of the allegations concerning the case of nerve agent Novichok.
The GBP has a busy week ahead, starting with a meeting of Brexit negotiators David Davis and Michel Barnier in Brussels today aiming to find a preliminary transition agreement. The EU Summit on Thursday and Friday this week will represent the formal announcement of the progress made.
GBPUSD finds support at 1.3880, while resistance comes in at 1.4000. EURGBP short term support lies at 0.8800 with resistance coming in at 0.8870 ahead of 0.8900 and 0.8970.
Looking to the week ahead, market focus will likely shift from trade protectionism to a number of central bank meetings, including the FOMC Wednesday and the BoE on Thursday.

PCM Enterprise - Development Firms Review