Risk appetite returns as shutdown ends

23 January, 2018

The rally in Asian equities resumed on Tuesday taking the lead from Wall Street after U.S. government shutdown came to an end on Monday. Although reaching a deal to fund the government for another 17 days is positive news, it isn’t necessarily the key driver of investors’ decisions. After all, government shutdowns have little or no impact on corporate earnings, and during the previous three, stocks still moved to the upside. However, a longer-term solution is required as we get closer to the debt ceiling. Failing to raise the borrowing limit would lead to a technical default, send yields on Treasuries higher, and potentially lead to a downgrade of U.S. credit rating. 

Meanwhile, investors are likely to ignore the overstretched valuations and continue moving with the flow. Many factors likely to keep fueling the rally, including positive earnings, Merger and Acquisition deals, and the upsurge in global growth. The IMF joined the party yesterday raising its outlook for economic growth in 2018 and 2019 to 3.9%. That represents an upgrade of 0.2% for each year.

BoJ: No Change in policy

The Bank of Japan decided not to surprise markets by keeping monetary policy unchanged. Traders who were speculating on early withdrawal of stimulus didn’t receive any signs of one. Given that price projections remained unchanged indicates that the exit of unconventional monetary policy isn’t likely to occur anytime soon, despite the BoJ announced earlier this month it was slightly reducing the purchases of long-dated JGB’s. The lack of surprise kept the USDJPY trading within a range of 50 pips during the Asian session.

Sterling pops above $1.4

The British Pound attracted most of the traders’ attention after breaking above $1.4 earlier today. The 1.4 is not only a psychological level, but it has also been considered a key support level during the past three decades prior to Brexit vote. Although a lot of the currency’s strength is attributed to dollar’s weakness, the Pound is the best performing major currency this year, and it’s up 1.35% against the Euro YTD which is a better proxy for Brexit negotiations.  With only tier-2 economic data due to release today I don’t expect to see big moves, however, I still believe there’s more upside potential if Brexit talks continued to move forward when they resume in March.

Source link  
Greenback falls on trade talks

The Dollar Index retreated from its 2018 peak of 96.98 following news that China will resume trade talks with the U.S. later this month. The news allowed...

Turkish crisis spreads into markets

The Turkish Lira resumed its drop early Monday touching a new record low of 7.21 per dollar before recovering slightly during Asia trade. Comments from...

Stocks surge amidst USD weakness

The major winner today was the US stock market as it continued to surge higher on corporate earnings and an upbeat jobs report as JOTLS openings came in strong...

Is Trump truly winning the trade war?

Escalating trade tensions between the U.S. and China remain the financial markets hottest topic. President Trump seems to be celebrating...

BoJ unwilling to shift gears yet

After weeks of speculation that the Bank of Japan may begin to adjust its stimulus program, the central bank once again decided not to join the global trend...

Oil and equities jump on global events

Oil is back on the move again after the recent attack against a ship off the coast of Yemen carrying oil. The Saudis have suspended shipping around that area until the...

USD and Oil in focus

The USD lifted again against all majors, as US retail sales m/m came in strong at 0.5%, in line with expectations. At the same time the previous month was...

Investors in cautious mode

Global equity and foreign exchange markets were relatively quiet on Wednesday as the U.S. financial markets were closed in observance of Independence Day...

Recession fears rise as trade war heats up

It has been an interesting first half for 2018. Economic fundamentals and politics took center stage as both fought for market influence.

In the past 24 hours Bitcoin has lost -1.05% and reached $6428.64140151. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -1.3466% and is now at $1.138. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -19.97% and is now at $292.596878525. 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
5FIBO GroupFIBO Group78%