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Uncertainty Remains in Global Trade Policies Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Mon Mar 20 17 01:37 ET

The key event over the weekend was the G20 meeting in Germany. However, the message over trade policies was ambiguous. The financial ministers shrugged off comments over preventing protectionism as US President Donald Trump suggested reconsidering the global trade order. As noted in the communiqué, the G20 nations pledged to "working to strengthen the contribution of trade to our economies". Yet, the statement omitted the previous pledge to "avoid all forms of protectionism". French Finance Minister Michel Sapin indicated after the meeting that "there wasn't a G-20 disagreement, there was disagreement within the G20 between a country and all the others. This isn't a caricature, this is the reality of things". Meanwhile, Canadian finance minister Bill Morneau suggested that "Americans were doing what any new administration would do - they were looking at the language through their lens", which is "how can trade benefit the US?". Morneau added that "everyone else has the same lens, but every other country has the advantage of being at the previous meeting". Financial ministers would meet again in July.

We have relatively a light week ahead. Starting with central banks, the RBNZ meeting would be held Thursday. It is widely anticipated that the OCR would stay unchanged at 1.75%. We expect policymakers also to maintain a neutral stance on the monetary policy outlook and forecast inflation to remain below target. RBA would release the minutes for its March meeting on Tuesday while BOJ would release the minutes for the January meeting on Wednesday. For the Fed, Chair Yellen, and presidents Dudley, George, Mester, Kashkari, Kaplan and Bullard would be delivering speeches later in the week. BoE Deputy Governor Broadbent would be speaking on Thursday.

On the dataflow, US release the January FHFA House Price Index and February existing home sales on Wednesday, followed by the February new home sales and the weekly jobless claims on Thursday. Friday comes the durable goods report for February. This is probably the most closely-watched indicator in the US this week. Headline orders probably grew +1.2% m/m, down from +2% in January. Excluding transportation, durable goods orders might have gained +0.7% m/m, compared with the flat reading in January. In the Eurozone, Markit's flash PMI readings would be due Friday. Ahead of it come Germany's Gfk consumer confidence survey and the French INSEE business confidence survey for March. In the UK, headline inflation, due Tuesday, probably rose to +2.1% y/y in February, from +1.8% a month ago. Core inflation might have also improved t +1.7% y/y, from +1.6% in January.

Commitments of Traders:

With the exception of natural gas, speculators were bearish over the energy complex in the week ended March 17. Net LENGTH for crude oil futures slumped -74 725 contracts from a week ago to 433 800. Net LENGTH of heating oil plunged -6 015 contracts to 31 331 while net LENGTH for gasoline decreased -3 852 contracts to 54 483. Net SHORT for natural gas contracted -18 656 contracts to 36 497 for the week.

Speculators were bearish over the precious metal complex last week. Net LENGTH for gold rose declined -27 647 contract to 106 038, while that for silver futures plummeted -10 575 contracts to 82 878. For PGMs, net LENGTH for platinum sank -8 452 contracts to 30 175 while that for palladium dropped -458 contracts to 16 578.


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