A fresh report on Wednesday saying the US-China have failed to make any progress since the G20 hurt sentiment. Moreover, there is a growing sense that the conditions aren’t right for a deal. GBP is the strongest currency on a combination of stronger than expected UK retail sales and comments from EU chief Brexit negotiator reviving hopes of reaching a compromise on the Irish border issue.See the notes on Alcoa, CSX and Netflix below. Euro lost ground on a report stating that the ECB may revamp its approach to inflation. Both of this week’s newly added Premium trades are in the green. There are currently 6 trades open. The Premium Video titled “The Short Backed by All 3 Metrics” is out.

A WSJ report said US-China talks are hung-up on executing the US pledge to allow Huawei to buy US technology. Once that’s sorted out, China has pledged to buy US agricultural goods. The problem is the White House is struggling to decide what to allow the Chinese telecommunications company to buy so everything has grinded to a standstill

The inability to make any concrete progress after several indications of an agreement is a sign of trouble. Equity markets stumbled Tuesday after initial comments from Trump expressing displeasure and they fell further Wednesday on the report.

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The economic backdrop also makes it tough to envision a deal. The US reopened talks in December after a 20% drop in stock markets; now they’re at record highs. There are also signs that China’s economy is surviving a pivot towards consumers with retail sales strong in the latest quarter.

G7 FX Chatter

Here is a tweet from Ashraf on the G7 meeting in Paris:

In other economic news, the Fed’s Beige Book underscored a solid US economy with ‘modest’ growth. Commentary highlighted unease about trade but a ‘generally positive’ outlook and higher loan demand. Earnings continue to paint a slightly different picture. Railway operator CSX warned of softening demand Tuesday and aluminum giant Alcoa cut its global demand forecast Wednesday. Netflix tumbled 13% on news that it lost 130K US clients.

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Ashraf Laidi is an independent strategist and trader, founder of Intermarket Strategy Ltd and author of "Currency Trading & Intermarket Analysis". He is the former chief global strategist at City Index / FX Solutions, where he focused on foreign exchange and global macro developments pertaining to central bank policies, sovereign debt and intermarket dynamics. Ashraf had also served as Chief Strategist at CMC Markets, where he headed a global team of analysts and led seminars and trainings in four continents. His insights on currencies and commodities won him several #1 rankings with FXWeek and Reuters. Prior to CMC Markets, Laidi monitored the performance of a multi-FX portfolio at the United Nations, assessed sovereign and project investment risk with Hagler Bailly and the World Bank, and analyzed emerging market bonds at Reuters. Laidi also created the first 24-hour currency web site for traders and researchers alike on the eve of the creation of the euro. Laidi's analysis of currency markets stand out based on his distinct style in bridging the fundamental and technical aspects of the markets. Laidi regularly appears on CNBC TV (US, Europe, Arabia and Asia/Pacific), Bloomberg TV (US, Asia/Pacific, France and Spain), BNN, PBSs Nightly Business Report, and BBC. His insights also appear in the Financial Times, the Wall Street Journal and Barrons. He has given numerous interviews and lectures in Arabic, French, and to audiences spanning from Canada, Central America and Asia/Pacific.


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