Traders continue to react to the victory of Donald Trump in the US Presidential Election. We look at how this seismic event has shifted expectations and sentiment across financial markets. It would appear that the bond markets and the dollar are leading the key moves and other markets continue to react this week. This report also looks at the technical outlook on forex, equities and commodities as traders look to dramatically re-position themselves for an outlook that took them by so much of a surprise.

1. Weekly Outlook
Monday 14th November by Richard Perry, Market Analyst
Forex and CFDs are high risk leveraged products that can result in losses greater than your initial deposit and you should
therefore only speculate with money you can afford to lose. FX and CFD trading are not suitable for everyone. Please
ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such
transactions. You should first carefully consider your investment objectives, level of experience, and risk appetite and only
invest funds you are prepared to lose entirely. For our full risk warning, please go to the end of this report.
WHEN: Fri 17th November at 1330GMT
LAST: +1.5% YoY (core +2.2%)
FORECAST: +1.6% YoY (+2.2% core)
Impact: Inflation will be the key indicator to watch in the
coming months after Trump’s reflation acceptance
speech. However inflation has already been picking up
on the headline for the past few months and is currently
the highest since the end of 2014. Core CPI is still a bit
sticky but trends are improving. CPI is not the Fed’s
preferred inflation measure but the two have clear
correlations and CPI could be leading PCE higher. With
inflation expectations picking up any upside surprise
would only add to dollar strength, higher yields and
chatter about Fed rate hikes.
Key Economic Events
Date Time Country Indicator Consensus Last
Tue 15th Nov 09:30 UK CPI YoY (headline / core) +1.1% / +1.5% +1.0% / +1.5%
Tue 15th Nov 10:00 Eurozone German ZEW Economic Sentiment +8.9 +6.2
Tue 15th Nov 13:30 US Retail Sales (MoM ex autos) +0.4% +0.5%
Wed 16th Nov 09:30 UK Unemployment (Av Weekly Earnings Growth) 4.9% (+2.4%) 4.9% (+2.3%)
Wed 16th Nov 14:15 US Industrial Production (Capacity Utilization) +0.2% (75.5%) +0.1% (75.4%)
Wed 16th Nov 15:30 US EIA Crude Oil Inventories 2.4m
Thu 17th Nov 12:30 Australia Unemployment 5.6% 5.6%
Thu 17th Nov 09:30 UK Retail Sales (YoY ex fuel) +5.4% +4.0%
Thu 17th Nov 13:30 US CPI YoY (headline / core) +1.6% / +2.2% +1.5% / +2.2%
Thu 17th Nov 13:30 US Building Permits / Housing Starts 1.20m / 1.16m 1.23m / 1.05m
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1N.B. Please note all times are BST (GMT+1), data source Reuters
Macro Commentary
Early on Wednesday morning as Donald Trump was romping towards an unlikely victory in the race to the White
House, markets were fearful. Fearful for the dollar, for equities and a flight into safe havens. However, this all
flipped around during Trump’s acceptance speech as he talked about a his vision for a massive stimulus program.
Markets turned quickly with Treasury yields soaring higher being the key move. If this spending defines his
presidency, Trump will drive growth through Keynesian-style fiscal spending of maybe $1 trillion. This drastic shift
against the austerity the world has seen amidst the de-leveraging since the 2008 financial crisis. This has huge
market implications. Treasury yields are jumping as traders expect higher growth and inflation. “Trumpflation” is
now a factor to drive markets. Also, the Fed monetary policy has previously been shackled by low inflation
expectations, but this now opens the way for a steeper tightening by the Fed. With steeper yield curves, banking
stocks have jumped, however the flip-side is the prospect of another Emerging Markets tightening “tantrum”.
Increasing inflation expectations and a tighter Fed is likely to put safe havens such as the Japanese yen and gold
under pressure again. Initial market reaction has given Trump the thumbs up, but notably we know nothing of
prospective anti-trade, isolationist policies yet. Markets could give growth expectations a very different perspective.
Must Watch for: US CPI
Core CPI
A continuation of the rising trend would be dollar positive

2. Weekly Outlook
Monday 14th November by Richard Perry, Market Analyst
Foreign Exchange
There has been a remarkable volte-face in the dollar outlook on a Trump presidency. In the run to the election,
any time Trump’s prospects improved the dollar suffered. However, with a reflation-centric acceptance speech,
the US yield curve has dramatically steepened and the outlook for US rate hikes has tightened. Subsequently
the outlook for the dollar has sharply improved. The trade weighted dollar index is testing the 99.8 resistance
from January but the 100 level is important and the 100.5 key November 2015 high. This journey may not
though be smooth. The volatility from the Trump surprise victory is yet to fully settle down and some dollar longs
are sitting on big (surprise) profits. Some key levels are breaking with EUR/USD below $1.0800 and Dollar/Yen
through 107.47. Could this lead to some volatile profit-taking too? With markets stretched it is possible, however
for now the dollar strength continues. However, the decks are clear for dollar strength in the run to the Fed rate
hike in mid-December now and I would view any corrections as a chance to buy the dollar. The interesting
exception to this seems to be sterling which has outperformed across the forex spectrum in the past week and
is one of the very few currencies to outperform the dollar since Wednesday. Yield differentials for sterling are
strengthening and supportive for sterling, whilst a Trump presidency improves the prospects of a US/UK trade
deal. Expect more volatility this week with key CPI and Retail Sales data for both the UK and US.
WATCH FOR: Cable will be volatile with CPI and Retail Sales for both US and UK, and UK wage growth
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FX Outlook
GBP/USD
Watch for: Despite the dollar strength on forex,
Cable remains strongly configured for gains
Outlook: With daily traded volumes still at record
levels, Cable remains a popular pair to trade. It
has been forming a remarkable improvement in
the past few days as sterling has outperformed
across the forex space. Technical indicators
remain positively configured and corrections are
being bought into, with the RSI tending to run
into the mid-60s in previous rallies. Having
broken out above $1.2557 an early decline today
could prove to be another chance to buy. There
is little resistance of note until the old floor of the
summer range between $1.2800 and $1.3480.
The base pattern breakout neckline at $1.2330
continues to form the major support for the bulls.
EUR/USD
Watch for: Below $1.0709 opens further
weakness to the key $1.0538 low
Outlook: Rallies continue to be sold into on the
euro and the sellers are in complete control for
now, in a move that has broken below the
support at $1.0800 and is now set to test the
January 2016 low at $1.0709. Although the
prospect of a near term technical rally is still high
after such a strong move, the outlook for
EUR/USD continues to deteriorate, with moving
averages all falling in bearish sequence and
momentum indicators in negative configuration.
A breach of $1.0709 would open $1.0538, the
December 2015 key low. Even if there were to
be a near term rally there is significant overhead
supply preventing a serious rally. Resistance is
strong between $1.0850/$1.0950.

3. Weekly Outlook
Monday 14th November by Richard Perry, Market Analyst
Equity Markets
What a ride on equity markets! The futures on Wall Street were pointing to 700 points lost on Wall Street as
Trump was moving to victory, only for a massive rally in the wake of his acceptance speech and the huge
potential fiscal spending package. Potential changes to banking regulations (Dodd Frank) also have banks
soaring. On Wall Street the Dow Jones Industrial Average has moved to an all-time high. Can the moves be
sustained though. The S&P 500 has posted a huge doji candlestick (denoting uncertainty) and after the huge
rally, there could be a temptation to look for profits. In Europe, markets such as the DAX and FTSE are giving
mixed signals. The DAX continues to trade in its four month trading range and is testing the highs around
10,800 however technical signals are back around levels where profit taking within the range has recently been
seen. FTSE 100 is a different prospect and is being impacted by the rebound in sterling. One of the key
reasons behind the strong FTSE 100 performance since Brexit has been sterling weakness with over 70% of
FTSE 100 revenues generated in foreign currency. However sterling has recovered strongly since Trump’s
victory and the negative correlation with the FTSE 100 is back in play, driving significant underperformance of
large cap UK equities. The longer this sterling rally continues, the longer the underperformance of FTSE 100
can be expected and the support band of the lows between 6612/6676 will now be key. The oil price remaining
under pressure will only add to the corrective momentum.
WATCH FOR: The volatility should begin to settle post the US election, whilst US Retail Sales and CPI
could be key sentiment drivers with the prospective impact on the Fed.
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DAX Xetra
Watch for: Can the bulls sustain a momentum
breakout above 10,800?
Outlook: The DAX remains medium term range
bound and is far more positively configured than
European counterpart, FTSE 100. The range is
between key support at 10,175 and resistance
at 10,829 however the upper boundary of this
range is once more being tested. Near term
momentum is positive but the RSI has stumbled
around 60 consistently in recent months. Is this
time different? The positive market sentiment is
helpful and support is around 10575 early this
week. A breakout would open the upside to
11,000 with the next key resistance not until
11,430.
FTSE 100
Watch for: The sell-off needs to hold up above
6612/6676 otherwise the bears will be in control
Outlook: Volatility remains elevated in the wake
of the Trump victory but the failure at 6997 now
means there is an increased prospect of a big
top pattern formation. There are three key lows
of August, September and November between
6612/6676 and a breach would confirm the top
which would complete a large head and
shoulders top pattern and imply a continued
correction back towards 6180. Momentum
indicators are concerning with the near term
rebounds failing and simply look to have
renewed downside potential. This key range
6612/6676 will be watched closely by the bulls
this week. Key resistance is 6997.
Index Outlook

4. Weekly Outlook
Monday 14th November by Richard Perry, Market Analyst
Other Assets: Commodities & Bonds
Commodities have had a wild ride (as most asset classes have) since the Trump victory. Gold and silver have
come under significant corrective pressure since Trump alluded to a huge growth and inflation orientated fiscal
stimulus. Gold performs less well during a reflationary period and a retreat back towards the key support at
$1200 could now be seen. In contrast, base metals (which would benefit from the infrastructure spending) have
soared. Oil is the interesting anomaly, as it does tend to be positively correlated to growth, however the ongoing
concerns over supply continues to dog the price, which remains under pressure. With Friday’s weakness, oil is
now over 2% below the level it was just prior to the OPEC agreement production limits, which could be telling
us what traders think of the agreement. Traders will begin to eye the OPEC meeting at the end of the month.
The bond markets have been compelling viewing since the victory of President-elect Donald Trump. According
to Bank of America there has been over $1 trillion wiped off bond markets in the past week as yields have
spiked higher and the yield curve has dramatically steepened. At the more sensitive long end of the curve the
30 year Treasury yield jumped the most since January 2009. A huge fiscal expansion increases growth and
inflation expectations and is driving a significant repricing. The moves are also not limited to the US, as yields in
the Eurozone have also spiked higher. The German 20 year Bund yield has spiked higher by 20 bps.
WATCH FOR: Volatility to continue with US Retail Sales & CPI impacting commodities and bonds
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Gold
Watch for: Further retracement towards $1200
could now be seen
Outlook: Gold is under pressure from Trump’s
reflation rhetoric, the strength of the dollar and
the improved risk outlook. Subsequently gold
has plummeted below the important October low
at $1241 and the way is now open towards a test
of the key first half support at $1200. Momentum
indicators are bearishly configured but also with
downside potential and rallies will be seen as a
chance to sell. There will now be a band of
resistance between $1241/$1265 which will be
seen as a “sell zone”. The volatility is still high
and this is likely to generate some opportunities
in the coming days.
Markets Outlook
Brent Crude oil
Watch for: Bearish momentum continuing to
test $43.45
Outlook: After a brief degree of respite during
the week of the Presidential election, the oil price
has started to gain traction lower again. The
Brent Crude price has closed at a four month low
and this is an important breakout which opens
the way for a test of $43.45 this week but more
importantly the key August low at $41.50. The
stranglehold the bears have at the moment has
completely unwound any of the bullishness from
the OPEC production agreement and
momentum is now deeply negative. There is now
a key resistance in place at $46.95 and rallies
will be seen as a chance to sell.

5. Weekly Outlook
Monday 14th November by Richard Perry, Market Analyst
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only invest in FX, Bullion and/or CFD trading with funds you are prepared to lose entirely. Therefore, only your excess
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