The document provides a weekly economic and market outlook. It summarizes key economic data and events for the week, including the important US ISM non-manufacturing data on Monday. It then analyzes the outlook and risks for foreign exchange markets, equity indexes, commodities, and bonds. The author expects safe haven currencies like the yen and Swiss franc to perform well due to dovish central bank policies. Equities face downside risks from slowing global growth and trade tensions. Gold is seen as continuing to rise on falling real yields and trade uncertainty.

1. Weekly Outlook
Monday 5th August 2019 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.
Key Economic Events
WHEN: Monday 5th August, 1500BST
LAST: 55.1
FORECAST: 55.5
Impact: On a light week for the calendar, the big data
point comes early. Tier one US data will have a key
impact on how the Fed proceeds with any future rate cuts.
The ISM data is forward looking and Non-Manufacturing
is key for an economy which is around 70% household
consumption. Holding above 55 on the PMI is a sign of
decent growth where the Eurozone is c. 53, China c. 52
and UK c. 50 suggesting that US economic
outperformance remains on track as the global slowdown
continues to take hold. Positive surprise is dollar positive
and yields higher, but could still be risk negative.
Date Time Country Indicator Consensus Last
Mon 5th Aug 1500BST US ISM Non-Manufacturing 55.5 55.1
Tue 6th Aug 0530BST Australia RBA monetary policy No change +1.00% Cut 25bps to +1.00%
Tue 6th Aug 1500BST US JOLTS jobs openings 7.27m 7.32m
Wed 7th Aug 0300BST New Zealand RBNZ monetary policy CUT 25bps to +1.25% 1.50%
Thu 8th Aug n/a China Trade Balance (Imports / Exports) +$44.2bn (-8.8% / -0.2%) +$51.0bn (-7.3% / -1.3%)
Fri 9th Aug 0050BST Japan GDP (prelim Q2) +0.1% +0.6%
Fri 9th Aug 0230BST China CPI / PPI +2.7% / -0.1% +2.7% / 0.0%
Fri 9th Aug 0930BST UK GDP (prelim Q2) 0.0% +0.3%
Fri 9th Aug 0930BST UK Trade Balance -£11.9bn -£11.5bn
Fri 9th Aug 1330BST US PPI (core / headline) +1.7% / +2.3% +1.7% / +2.3%
T: +44 (0) 20 7036 0850 │ E: info@hantecfx.com │ W: hantecfx.com
1N.B. Reuters data where possible. Please note all times are now British Summer Time (GMT+1)
Macro Commentary
Although markets are taking more of a settled outlook after a tumultuous past week, as the dust settles, there are
some key standout themes. The Fed cut rates but disappointed the market, but pricing continues to suggest that
the Fed will have to go further in its cuts. The Fed may be data dependent (according to the FOMC statement) but
that was before Donald Trump has subsequently announced tariff increases on China. The tariffs could perpetuate
the global slowdown which the US is not immune. PMIs are dropping to show a US deceleration but also inflation
expectations will be hit (look at the ISM Manufacturing Prices Paid index plummeting). S economy – see the
downward which continues to push for further rate cuts. The market believe that Fed has got it wrong. Although the
dollar spiked higher on the Fed, this move is likely to struggle for traction. We favour the safe haven plays in these
markets. Yield differentials should help the yen and Swiss franc to perform well. Rates already at rock bottom levels
can only see differentials squeezed (especially with the Aussie and Kiwi). However, this should also pull negatively
on the likes of Euro/Yen, Euro/Swiss and Dollar/Yen. We also favour the outlook for gold. Real yields are falling and
with the continued concerns for the escalation of the tariffs dispute, the outlook for gold remains favourable.
Furthermore, the outlook for higher risk assets such as equities also looks worrying. Fed rate cuts may sound good
for equities, but in an environment of worsening economic outlook, it should be the bears who will prevail.
Must Watch for: ISM Non-Manufacturing
US PMIs on a deteriorating trend.
US PMIs have been slipping back for the past 10 months but the
more dominent service sector (ISM Non-Manufacturing) remains in
decent expansion mode above 55.

2. Weekly Outlook
Monday 5th August 2019 by Richard Perry, Market Analyst
Foreign Exchange
It is difficult to know where to start as we try to pick the bones out of hectic past week. A dollar breakout, but a
move that we believe will struggle for sustained outperformance. If the Fed is set to embark upon a series of
rate cuts (as markets are pricing, effectively saying the Fed has got it wrong recently), then rate differentials
could continue to tighten to the extent that the dollar struggles for traction. However, there will be a clear divide
in forex markets now, where safe havens perform well and the higher risk commodity currencies struggle. The
Bank of Japan is not going to cut rates form -0.10% any time soon, whilst the Swiss National Bank is also fairly
well anchored to its -0.75% deposit rate. With other central banks set on a renewed dovish path (ECB, and
likely the Fed) this will benefit the Swiss franc and Japanese yen which we see as solid performers now. The
flipside of this is the commodity currencies. The Reserve Bank of Australia has its monetary policy decision on
Tuesday and although is not expected to cut rates, could take on a more dovish stance. Similarly with the
Reserve Bank of New Zealand which is expected to cut rates by 25 basis points. The US/China trade dispute is
a dovish influencing factor for both the RBNZ and RBA. It was interesting to observe the Bank of England last
week, being massively hamstrung by Brexit. Sterling remains under selling pressure as the PMI data shows that
Brexit continues to negatively impact on business confidence and the UK economy is stagnating. A no deal
Brexit would tip it into recession.
WATCH FOR: US ISM Non-Manufacturing for USD, the RBA and RBNZ for AUD and NZD
T: +44 (0) 20 7036 0850 │ E: info@hantecfx.com │ W: hantecfx.com
2
FX Outlook
GBP/USD
Watch for: The failure to sustain any potential
technical rally maintains bear control.
Outlook: The support around $1.2100 is key
early this week, but the failure to engage any
sort of recovery for sterling will be a real concern
for the bulls that are now running the risk of
another downside break this week. However,
there is still room for a near term technical rally.
Whilst one is not forthcoming for now, we would
see any rally that does take off failing under
$1.2380/$1.2435 resistance band to give
another chance to sell. A close under $1.2100
would open the critical support at $1.1980 which
we see is a likely test in the coming weeks.
EUR/USD
Watch for: How the market reacts in the
$1.1100/$1.1200 band will be key for the outlook
Outlook: A downside break of $1.1100 was a
crucial move that suggests the euro is under
pressure. However, an instant rebound back into
a band of overhead supply between
$1.1100/$1.1200 now leaves the market at a key
crossroads. A six week downtrend falls below
$1.1200 this week, whilst momentum indicators
are still negatively configured on a medium term
basis to suggest that near term rallies are a
chance to sell. Posting another lower high in
$1.1100/$1/1200 this week would be a signal for
renewed selling.

3. Weekly Outlook
Monday 5th August 2019 by Richard Perry, Market Analyst
Equity Markets
The argument has been that a Federal Reserve cutting rates is a positive for US equities. That could be
justifiable if they were engaging a series of rate cuts and the economy remains solid. The rate doves / equity
bulls were left disappointed by the July FOMC rate cut which did not explicitly call for further cuts. However,
Trump’s move to impose further tariffs on China may ultimately induce the Fed to cut rates further (another two
cuts is priced for the remainder of 2019) but the sentiment impact is entirely different. The Fed cutting because of
real fear of economic slowdown (induced by the tariffs) has a market feeling that earnings growth will need to be
significantly downwardly revised. Suddenly the S&P 500 trading on 16/17 times earnings with potentially
negative earnings growth for 2019 does not look such good value. Rate cuts due to deteriorating economic
outlook are negative for equities. Over in Europe, the DAX is set to be the underperformer (especially versus
FTSE 100). First of all, huge weighting in financials (ECB looks ready to cut the deposit rate further) and car
makers (will Trump turn to Eurozone tariffs next?) does not read well for the DAX. The German index is an
export heavy market, strongly geared towards global growth. Another reason behind FTSE being a relative
outperformer is the negative correlation to sterling. Brexit concerns have seen sterling falling sharply in recent
months, but the move has really taken hold as the prospect for a no deal Brexit has significantly increased.
Sterling falling is a positive for the c. 70% of foreign earnings on FTSE when translated back into sterling.
WATCH FOR: The reaction of China to the trade tariffs will drive sentiment. Sterling outlook for FTSE
T: +44 (0) 20 7036 0850 │ E: info@hantecfx.com │ W: hantecfx.com
3
DAX Xetra
Watch for: Key support to watch at 12,190 on a
hawkish Fed. Above 12,465 re-engages the bulls
Outlook: The DAX is getting smashed right now.
A near to medium term downside target from the
June/July top of c. 11,700 has been achieved
with less than two sessions but now the key
June low at 11,620 is in line to be tested. This is
a really important medium term support level
which if decisively broken would imply a key
change in trend. The bulls need to react quickly
back above the old 11,845 support which would
be back above the 144 day moving average.
However, looking at medium term momentum
configuration there is now a far more negative
look. This would be confirmed below 11,620.
FTSE 100
Watch for: A test of the key support band
7040/7080 is shaping up.
Outlook: A massive shift to negative momentum
along with sizable selling pressure has taken
hold. This has now broken the seven month
uptrend channel. Coming with decisive sell
signals on momentum with bear crosses on
MACD and Stochastics, there is now a strategy
of using rallies as a chance to sell. This will be
the case whilst the market now remains under
the old pivot at 7370 which will become a key
basis of resistance this week. A continuation of
the sell-off means that the key multi month
support band 7040/7080 comes into range.
Index Outlook

4. Weekly Outlook
Monday 5th August 2019 by Richard Perry, Market Analyst
Other Assets: Commodities & Bonds
Gold catches a bid on a safe haven bias. With the negative US economy implications from the trade tariffs and
the market pricing for the requirement for further rate cuts, the dollar is being pressured. This is a double
positive impact on gold. Fundamentally with real yields falling, gold will continue to rise. Weakness will be seen
as a chance to buy, on a fundamental perspective and with the technicals also remaining strong, the outlook for
further upside looks strong. It is interesting to see that silver has just lost some of its strong recent performance.
The outlook for oil has tilted in the balance of the bears again as Donald Trump cranked up the trade dispute
again. For more than a year now, with the trade dispute rumbling on, the global slowdown has negatively
impacted the outlook for growth. Subsequently, whilst Donald Trump continues with this line of protectionism,
the outlook for oil demand growth will be restricted, thus tipping a finely balanced market negative. Selling oil
into strength remains the most viable strategy.
Bond yields have fluctuated wildly (especially the shorter end of the Treasury yield curve). However, if Trump
continues this line of attack, then curve flattening is likely in the US as the outlook for future growth is slashed.
The argument is that the US may have more to lose in rate differentials (i.e. more cuts to come) especially
against JGBs and perhaps even Eurozone bonds.
WATCH FOR: A Chinese retaliation on trade, also US ISM Non-Manufacturing
.
T: +44 (0) 20 7036 0850 │ E: info@hantecfx.com │ W: hantecfx.com
4
Gold
Watch for: Support to buy into weakness now
between $1430/$1452.
Outlook: The significant shift into safe haven
assets of recent days has driven gold to multi-
year highs again. Momentum indicators have
swung sharply positive once more and there is
now a breakout support band $1430/$1452.
There is little real resistance overhead (as it
dates back to 2013 now) and $1500 is the next
level of note. The bulls need to be aware that
recent breakouts on gold have quickly retreated
again, meaning that there will likely be
opportunities to buy at better levels throughout
the coming days, however, we continue to view
weakness on gold as a good chance to buy.
Markets Outlook
Brent Crude oil
Watch for: A three month downtrend is still
dominant and rallies are a chance to sell.
Outlook: Oil sold into strength again within the
scope of a downtrend that dates back to late
April. With momentum indicators rolling over
again we continue to view rallies as a chance to
sell. The support band $59/$60 is likely to
remain under pressure with any near term
rebounds expected to be short lived. The 38.2%
Fib level around $64 is a basis of resistance this
week. A breach of the 23.6% Fib level at $58.60
would open the key December 2018 low around
$50.

5. Weekly Outlook
Monday 5th August 2019 by Richard Perry, Market Analyst
T: +44 (0) 20 7036 0850 │ E: info@hantecfx.com │ W: hantecfx.com
5
Risk Warning for Financial Promotions
This report is issued by Hantec Markets Limited, who is authorised and regulated by the Financial Conduct Authority
(FCA) in the UK, No. 502635. The report is prepared and distributed for information purposes only.
Trading in Foreign Exchange (FX), Bullion and Contracts for Differences (CFDs) is not be suitable for all investors due to
the high risk nature of these products. Forex, Bullion and CFDs are leveraged products that can result in losses greater
than your initial deposit. The value of an FX, Bullion or CFD position may be affected by a variety of factors, including but
not limited to, price volatility, market volume, foreign exchange rates and liquidity. You may lose your entire initial stake
and you may be required to make additional payments. Please ensure you fully understand the risks involved, seeking
independent advice if necessary prior to entering into such transactions. Before deciding to enter into FX, Bullion and/or
CFD trading, you should carefully consider your investment objectives, level of experience, and risk appetite. You should
only invest in FX, Bullion and/or CFD trading with funds you are prepared to lose entirely. Therefore, only your excess
funds should be placed at risk and anyone who does not have such excess funds should completely refrain from engaging
in FX and/or CFD trading. Do not rely on past performance figures. If you are in any doubt, please seek further
independent advice.
This report does not constitute personal investment advice, nor does it take into account the individual financial
circumstances or objectives of the clients who receive it. All information and research produced by Hantec Markets is
intended to be general in nature; it does not constitute a recommendation or offer for the purchase or sale of any
financial instrument, nor should it be construed as such. All of the views or suggestions within this report are those solely
and exclusively of the author, and accurately reflect his personal views about any and all of the subject instruments and
are presented to the best of the author’s knowledge. Any person relying on this report to undertake trading does so
entirely at his/her own risk and Hantec Markets does not accept any liability.
Trust Through Transparency
Hantec House, 12-14 Wilfred Street, London SW1E 6PL
T: +44 (0) 20 7036 0850
F: +44 (0) 20 7036 0899
E: info@hantecfx.com
W: hantecfx.com