Reasons to be cheerful

25 July, 2016

The overall mood in markets at the start of the week appears to be pretty positive. Equities are again close to new highs in the US, whilst bond yields have backed up from the recent lows. The message appears to be that things aren’t as bad as perhaps everyone feared. This is also seen beyond the US, with broader share indices also at new highs for the year and bond yields moving tentatively up from the lows seen earlier this month. Despite this, the data in the run up to the Bank of England meeting early in August could change this as we start to get the first true readings of the health of the post-vote economy.

Both the US Fed and Bank of Japan meet this week. The Fed decision on Wednesday is all about the subtle shifts in the statement and whether there are any further signs of intended tightening later this year. The BoJ has more scope to bring volatility to markets, given the greater likelihood of some policy action either on rates or asset purchase programs. The market is positioned for some action on both as a means to boost the flagging Japanese economy. The yen has been weakening for most of the past two weeks, although a more consolidative tone has been seen over the past week. The BoJ’s ability to influence the yen for this year has been severely limited though, so it’s not necessarily the case that greater than expected policy action will weaken the currency on a sustained basis. For today, the data calendar is very much on the light side, so trading ranges are likely to be on the tight side ahead of the central bank meetings later this week.


Source link  
USD Firms Ahead of Q4 GDP Final Reading

The dollar index has rebounded noticeably from a 4-and-a-half-month low of 98.85, helped by outperforming...

Divergence Between Fed and BoJ

The March FOMC meeting will be held for two consecutive days from today. The interest rate decision will be announced at 18:00 GMT on Wednesday 15th March...

Market Volatility Expected Ahead of President Trump's Speech

In a speech that will be watched by millions of viewers in the United States and around the world, the President is expected to speak of his presidency and address pressing issues like his plans for health care, the tax system, the military, and his goals for his administration...


Gold Trades Below Resistance Ahead of the Fed and NFP

We will see the release of the US ISM Manufacturing PMI, and ISM Prices Paid for January, at 15:00 GMT on Wednesday 1st February...

Sterling Struggles Ahead of Theresa May's Speech

Theresa May will make a speech outlining her plans for Brexit tomorrow, Tuesday 17th Jan, before the UK triggers Article 50 to leave the EU...

Dollar Turn-around on Trump's Press Conference

President Elect Trump's first press conference after his victory in the US presidential election, was held yesterday around at 16:00 GMT. It has caused great volatility to the dollar and the markets...


Gold Nears Major Resistance Ahead of Trump’s Press Conference

Gold prices have rebounded since mid-Dec after testing the significant support line at 1120. On the 4 hourly chart, gold bullish momentum has been strengthened since the beginning of this year, helped by the dollar retracement...

Searching for a new narrative

Popcorn at the read today as President elect Trump has a scheduled news conference later in the day (around 16:00 GMT). Markets have become used to listening to him in 140 characters or less over the recent weeks, so a more elongated narrative should be welcome...

The sterling conundrum

Yesterday's early weakness in sterling, on the back of the latest comments from PM May surrounding Brexit, took cable close to key support levels and the resilience seen through most of the post US election period has been unwound...

  


Share: