A nervous New Year

January 4, 2016

As liquidity returns to markets at the start of the New Year, we’re seeing a fairly uncomfortable start, with trading halted in Chinese equities after a 7% fall in the Chinese composite index. The more risk averse tone has been reflected in other equity markets in Asia and is also being carried over into European trade and currencies. The latest China PMI manufacturing data (Caixin) fell to the disappointing side of expectations at 48.2, from 48.6 previously. We’ve also seen the USDCNY fixing above the 6.50 level, suggesting that the appetite for a weaker currency is likely to remain in the early part of 2016.

The yen has been the main beneficiary on developments so far, USDJPY bursting below 120 to levels last seen mid-October. But the impact has been felt elsewhere, with higher-yielding and commodity currencies under pressure, with the kiwi, Aussie and Canadian dollar all weaker vs. the US dollar. Also not helping has been the escalation of political tensions between Saudi Arabia and Iran after diplomatic relations cut in the wake of an attack on the Saudi embassy in Tehran. Not surprisingly, gold has benefited from this general tone of risk aversion, up nearly 1% during Asia trade.

Naturally, it’s going to be the US employment report on Friday that will shape the coming week, especially with the dollar likely to be increasingly sensitive to the tone of data releases as the market gauges when the Fed may make its next move. For today, we have some regional CPI data in Germany, together with manufacturing PMI data in the UK and ISM data in the US. Expect volatility to remain on the high side as markets settle into a more nervous start to the New Year.

Publication source
FxPro information  FxPro reviews

October 24, 2016
A volatile week ahead
Global stocks were resilient last week Friday with major arenas clawing back gains following the upbeat corporate earnings and stabilising oil prices which revived risk appetite...
October 24, 2016
Gold prices edged lower
Gold prices traded mixed on Friday. The yellow metal traded lower the half of the day and higher the other half. Sellers moved the price to the level 1260 dollar per ounce which appeared a solid barrier for it. The pair bounced from the level and reversed some of its losses...
October 24, 2016
Earnings and Macro data to drive financial markets the week ahead
A pretty robust U.S. corporate announcements last week indicated that there’s a high chance for corporate America to get out of a profit recession which lasted for five consecutive quarters...

Vantage FX Rating
FBS Rating
FXTM Rating
Larson&Holz IT Ltd Rating
Orbex Rating
OctaFX Rating

Banc De Binary Rating
OptionRally Rating
TropicalTrade Rating
IQ Option Rating
Anyoption Rating
365BinaryOption Rating