Let’s talk about what has happened in the last week and what are the potential opportunities that we can actually Avail for this week as well. Now before we get into this one, I must say about this Belarus and Poland board attention as I’ve mentioned last week as well. That it probably would actually, you know go to the next level because at the moment it’s difficult for the Belarus to actually you know keep the you know the army of Wagner. You know under control so that’s why they’re looking for some sort of attention between these and also in Poland.
We have elections coming up very soon so it might be a trade that probably you know a ruling party at the moment. The opposition is actually you know preparing for some sort of a scare. feeling that they want to give it to the voters in order to eradicate their outcome. so probably like I said to you will probably be something that you probably want to keep an eye on. It might actually be impacting the trading market in terms of the gold and the silver, most of them Commodities. if that what you do you escalate you’d probably expect that gold in the silver market to become bullish.
Again on top of that the major news last week was, China heading towards deflation. I don’t know if any of you have heard this but if you have, You Must Be Wondering like, we have been hearing about inflation. What is deflation? It is totally opposite to inflation and it’s not a good thing.Let me tell you that because remember High inflation is not good as well as deflation is not good. Now if you are in the middle of these two, then you’re doing good. but if you are actually in any of these. on the higher or the lower end then you are pretty much you know exposed to either a lower demand or a higher cost of living. Now China is in deflation I just wanted to take a few minutes of yours to explain that you know how it impacts?
The financial market and how it is going to trigger us all. you know to take some precautions in the next few months. Now first of all, remember when any country goes into deflation, especially an economy like China, what you would actually expect is the production.You know, especially the production, the manufacturing part which China is actually leading at the moment in the world. that would actually slow down.
You might actually ask this question that if this is everything is cheaper why people would not buy it. Because the demand is lower than the supply and that is pretty much the main factor for the deflation. China has been producing too much. you know, anticipating the post pandemic the demand will be higher and because of the cost of living in the different parts of the world it has actually impacted the buying power of the different countries and that’s why those you know the production that China has been doing pretty well. you know pre-covered has not actually you know searched the demand post pandemic so because of that they had a lot of supply and now all of these you know big companies they have started selling their stock at the lower price and because of that the prices has started to plummet and when that happens you’d see that deflation will start to you know kick in.
Now because of the deflation in China you would see that you know it will be impacting the inflation in the west and Europe especially the major economies in the Europe and especially America as well. Because remember they’re all the customers of you know Chinese Goods and because of that you’re gonna see that very soon the rate hikes are going to stop. because it’s going to impact inflation. and once the inflation is under control we are going to you know see all these currencies all these big Banks you know the top economies will start to go to the rate Cuts. I’m just giving you that you know sort of advanced you know sort of a warning in you know just to keep around this one don’t expect ever from now onwards we will not be expecting any of the banks to increase the interest rate. because again it’s going to impact the inflation of all over the world because of China being in deflation and and it’s it’s going to be a you know it’s going to be a major effect all over the place if I wouldn’t mention the South Asian or Southeast Asian Part of it doesn’t mean that it’s not going to impact there. it will be impacting that side as well it’s just you know whenever you have the rate hikes happening and then all of a sudden you know the inflation gets under control you will see the unemployment rate start to go up you will see the rate Cuts will start to happen and that actually triggers the economies to go into Recession.
That’s always going to be the case any student of the past recessions you should go and read the behavior and again that’s why I’ve been saying that to you these patterns you’re going to see that very soon in the making where you would potentially be you know you’d be seeing that the news will start to you know show about mainstream media we’ll be talking about the recession mainstream media will be talking about you know inflation getting under control because China has actually set up their you know inflation Target at three percent but there has gone into negative territory in 2023.
Again this is not something small it might actually sound small but it will be impacting the word you know slowly and gradually now because of that you must have seen that you know all these Euro and New Zealand players have started to go to the downside which is what obviously the structure was telling us. But that you know it was typical Iceberg you know that China being in deflation so keeping on this one but we Are Gonna Keep in our mind that any CPI news that comes forward going forward we are going to expect that number to be below the forecast, Below the actual at least once we go to the Chart and once we go to the calendar we talk a bit about that this week we are expecting the cad CPI we’re expecting the GBP CPI and we’re expecting the New Zealand rate hike and you know the answer that we will be expecting we’ll be expecting CPI number to drop which means if it’s a cad CPI you would expect cat to drop if it’s a GBP CPI you would expect the GBP to drop and if anything else comes in in the future any rate statement comes in you wouldn’t expect them to increase the interest rate. now the only exception to this will be the United States one.
Again in this month we are not expecting any hike anyway. In September we’ll probably have to look at it. You know what the thing will be because the inflation number that they have you know expected last time. I believe it was you know below what they were expecting .but again the PPI number has been positive and that’s why you know the structure needed to go to the upside anyway that’s why we said that to you in August whatever happens any data comes in it’s not going to impact the bullishness because it always bound to be in plus that after the next week when the you know the brick Summit will start you’re going to see some impacts on the market if they announce. Again it’s a big if if they announce the currency that is backed by the digital currency.
That is backed by gold you’re gonna see a massive impact in the market. you might see at that point you know dollar being a sell-off you know for just for a deeper pullback. but again it might not be happening in this Summit it probably will be they might be delaying it for the next Summit . again in all the cases. we’ll be keeping an eye on it and if there is a change in that you know Paradigm Shift we’ll let you guys know .let’s have a look at the calendar and then we head over to the charts now Monday probably a flat day nothing you would expect on Monday most likely you will have a structural day.
On Tuesday we will be expecting monetary policy meeting minutes and also the wage index now because of this you probably would expect some sort of a pullback starting from the Aussie side and then after that another break to the downside again that break might not just because of the odds because of this industrial production here on here as well again industrial production I’m expecting this number they are anyway forecasting this number to go down but we would expect this number to be if this one is below 4.3 percent you would expect the Aussie to fall further.
Now where to that we’ll talk about it shortly anyway GBP claim and count change after that we’d expect again there is no forecast in that one but most likely we’re gonna get some sort of a pullback on the GBP and then another drop towards the level that we have given you one two five then we have CPI mantlement as I’ve just said to you most likely we’re gonna get this if we have an actual coming down below 0.3 percent and here Point they’re already dropping this median CPI and the trim CPI both of them they are expecting these numbers to go drop by point two percent and if both of these drops then you’re gonna expect the cad to get weaker which means you would expect CAD alternatives to go to the upside which will link with our trades of this week shortly which will be talking about it anyway call retail sales month on month would expect this one they’re expecting this number to go higher as well most likely we’re going to get some sort of a mixed signal in all of these three KPIs shortly in the structure you’ll see that how you go you can trade these three if you were to trade then.
On Wednesday, we have a cash rate for the New Zealand I’m not expecting them to increase the interest rate here so most likely by that point if we have already got the corrective structure we’ll expect a further breakdown and then we’ll see what Market has for New Zealand I do see some more downside and probably because of that you would expect Euro New Zealand pound New Zealand pound Oz and Euros breaking the last tops and then after that they will be breaking down CPI year on year again this number they’re expecting this again to be having a decent drop from 7.9 to 6.8 percent most likely we’re gonna get this pretty similar number here which will also be dropping the GBP to the downside again the CPA number any CPA number going forward you would expect you know would probably be aligning because it will have a trickle-down effect from the Chinese deflation.
Then we have meeting minutes most likely if the dollar has pulled back before that this number this kpi probably would push this to the upside to the dollar again employment change on Thursday. we’ll touch base on that one anyway on Wednesday in detail but in all the cases both of these numbers they’re expecting the unemployment rate to go to the upside which I do not doubt in this case which means again Aussie will be getting a slightly weaker in this week and all the Alternatives probably will be Pushing a further upside before the drop again.
Unemployment claims they are expecting these claims to go to the downside which will be good for the the dxy if this number is below this 240k then you’re expecting the the dollar to further become bullish then on Friday we have retail sales month on month again this number they’re expecting it to drop massively compared to the last actual if that would be the case further drop will be happening you know to the GBP due to this news. Right that is pretty much again as you can see most of the news will be happening Monday Tuesday and Wednesday and then after Wednesday we’ll see the Market slowing down a little. So most likely you would expect some decent you know moves before Wednesday and today we’ll touch base on all of them.
