The outlook on 2019 given the events so far this year
- 5 months ago
Let’s begin with the greenback, it has been climbing steadily however 2019 could see a slowdown as global growth seems to be cooling off. Meanwhile oil has been slipping on a downward trend regardless of the fundamentals which remained unchanged, mostly thanks to a positive atmosphere in the futures market.
Adding the fact that copper and other materials have not seen any signs of worry therefore it would be safe to assume that the weak prices are not driven by a lack of demand other than a struggle to monopolize the market.
We’d like to say that regardless of recent event the U.S. may eventually decrease output as OPEC enforces its own production cuts in the coming year, hence a 12-month target of $60 per barrel for WTI and a $65 per barrel for Brent is our outlook.
Then we have bullion, we’d like to slightly change our perspective for the coming 12 months, therefore an increase from the a previous $1280 per oz to $ 1240 per oz.
Gold has had a tough time this year as the U.S. economy gathered strength and with it so did the Dollar, nevertheless, it has been a time of holding and as it has found support at $1175 it would suggest that gold is definitely under-owned.
As we near the Fed’s last call on rates for the year, many have been slightly caught off guard at the dovish remarks by Powell, the U.S. dollar may come under some negative pressure, however in the meantime we expect it to maintain its grip until clarity has been given by the FOMC.
With that 2019 should see a more approachable and clearer attitude by the Fed, and the usual risks given to circumstances that will drive most major currencies.
The curtain has not come down on the Brexit saga and we can expect that same uncertainty to weigh on the pound.
The one main issue in the E.U. is the Italian budget which may see Rome give in to Brussels demands and as far as the current trade standoff between Washington and Beijing, the Australian dollar may be the one coming on strong along with the Japanese Yen improving due to risk sentiment.
Source: Smart Trend Team