Brexit and Trade Soon Solved?

As we watch Bloomberg TV and read the financial papers/websites: we are getting the impression that we may get two positive developments in the global financial markets.

  1. Brexit deal which will avoid a hard Brexit.
  2. Trade deal between China and the U.S.

In addition to the two stories above we had an Iranian oil tanker hit by two missiles by an unknown entity.

We won’t know if the EU is positive to the Ireland and UK idea of a compromise before the weekend.

(We are pretty sure that if Ireland is happy it will be difficult for the EU to not go along with the suggestion)

We won’t know the outcome of the U.S. China trade talks until after the close in New York most likely.

(We think something will get done, but will it only cover the low hanging fruit and leave the big hurdles for another day)

Will a trade truce be a relief and keep asset prices where they are or will it drive equities higher?

Is the rally in the British Pound the past 2 days warranted?

Will a positive result on the above mentioned issues help the SEK and NOK?

The equity markets, gold, GBP, bond markets, are currently pricing in a positive outcome.

30 minute chart of GBPUSD:  Market is telling us that the rumors of a Brexit solution seem to have some validity.

Gold is holding its recent range, but has fallen from the $5,010 level to the $1,494 level currently. Break of the $1,475 level will worry the gold bugs (us included)

The S&P 500 has been on a roll the past 6 sessions, bouncing off support and is back in the middle of rising wedge pattern again.  Trade result will be needed to avoid a test of lows we believe.

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