Rising political uncertainty weighs on sentiment

9 February, 2017

Stock markets were chaotic this week with most major arenas violently swinging between losses and gains due to the heightening political risks across the globe, escalating Trump developments and ongoing Brexit woes. Asian markets traded mixed on Wednesday as the Trump-off trading mood dented investor risk sentiment. With depressed oil prices potentially fuelling the risk aversion, European markets could come under renewed selling pressures in the short term. Wall Street remains gripped by the Trump uncertainty and the sensitivity in American stocks should be expected to rise as investors seek further clues on what policies US President Donald Trump may unravel this week. The threat of protectionist policies impacting global growth and overall political uncertainty eroding risk appetite could leave stock markets vulnerable to heavy losses in the medium to longer term.

Dollar remains Trumped

The Greenback staged an impressive rebound on Tuesday following hawkish comments from a US Federal Reserve official which reinforced expectations of a US interest rate hike in March. While the prospects of higher US rates may ensure the Dollar remains buoyed in the medium term, the erratic Trump policies coupled with concerns over protectionism impacting US growth could expose the Greenback to downside risks in the short term. It should be kept in mind that the driver behind the Dollar’s phenomenal gains was optimism over fiscal policies boosting US growth, and there is now a risk of the currency being sold incessantly if investors are left disappointed. Technical traders may observe how the Dollar Index trades within the daily bearish channel with a breakdown back below 100.00 encouraging a further decline lower towards 99.00.

Sterling dictated by Brexit woes

Sterling was extremely volatile this week as market participants reacted to signs of the UK government giving parliament a stronger say in the critical Brexit negotiations. It has become quite clear that Sterling remains dictated by the Brexit developments with price sensitivity set to heighten in the coming weeks as the article 50 invoke looms. The overall sentiment towards the Pound remains heavily bearish and uncertainty should provide a solid foundation for sellers to drag the Sterling/Dollar back towards 1.2350.  From a technical standpoint, the GBPUSD currently resides in a wide range but a breakdown below the pivotal 1.2350 level could encourage a steeper selloff back towards 1.2050.

Commodity spotlight – WTI Oil

WTI Crude was exposed to further losses on Wednesday after the shocking increase in U.S fuel inventories and decline in Chinese demand revived concerns of the excessive oversupply in the global markets. The resurgence of U.S shale amid the rising oil could undermine the efforts of OPEC and Non-OPEC members in mitigating the global oversupply consequently leaving oil prices vulnerable. There is a threat of the OPEC production cut deal falling apart in the future if U.S shale continues to pump incessantly. Although oil prices were initially buoyed by the optimism over OPEC and Non-OPEC members achieving roughly 82% compliance with its production cut, the big elephant in the room known as U.S shale should limit upside gains. The breakdown below $52 on WTI could spark a further selloff lower towards $51.


Source link  
Earnings vs. Interest Rates: who wins?

Global equity markets failed to resume any kind of strong rebound following Tuesday's surge. Asian equity indices are deep in the red today...

Dollar lifted by hawkish Fed minutes

Dollar bulls were back in action on Wednesday evening after minutes from the Federal Reserve's September meeting reinforced expectations...

Yuan firms on Dollar weakness

Global investors will likely remain on high alert throughout the end of the week to see if the largest market sell-off since early 2018 will...


EM currency weakness refuses to go away

Tuesday has seen stability in Chinese markets following a very nervous beginning to the new trading week yesterday. Signs of China market stability...

Yuan eases on risk-off sentiment

Financial markets have entered the new trading week on negative footing as a mixture of different market themes weigh on investor sentiment...

Risk assets under pressure from rates

Chinese equities took a big hit after traders returned from a week-long holiday. Efforts by the People's Bank of China to free more than $100 billion...


U.S. Treasury Yields boost the greenback

The U.S. Treasury selloff on Wednesday was the biggest story in the financial markets. This time it wasn't only the rate-sensitive two-year yields that marched higher...

NAFTA deal fails to lift global risk appetite

Global investors remained defensive on Tuesday despite the U.S. and Canada agreeing to a new trade deal ending months of uncertainty...

Dollar steady after Fed raises rates

In a widely expected move, the Federal Reserve has raised its key interest rate by 25 basis points for the third time this year. The central bank...


In the past 24 hours Bitcoin has gained 0.4% and reached $6487.5741168. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has gained 0.6352% and is now at $1.1587. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 3.0% and is now at $205.655270455. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Forex Market Analysis



Forex Currencies Forecasts



Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets91%
2FXTMFXTM88%
3HYCMHYCM87%
4Alfa-ForexAlfa-Forex86%
5FxProFxPro85%
6FIBO GroupFIBO Group84%
7OctaFXOctaFX83%
8HotForexHotForex82%
9FXCMFXCM80%
10AvaTradeAvaTrade77%
  


Share: