There’s a firmer tone in early trade across European and US stock index futures this morning. Investors were relieved that Wall Street got through the first session of the week with only a modest loss on the NASDAQ100 and small gains for the Dow and S&P500. There had been fears that last week’s selling may accelerate given the ructions and uncertainty apparent within the Trump administration and concerns that this week’s US/South Korean military exercises around the Korean peninsula could trigger hostilities with North Korea. But for now it looks as if traders are taking advantage of the recent sell-off to buy the dips, in tried and tested manner. The question is if it will work as well now as it has in the past.
Crude oil has steadied after plunging yesterday afternoon although it has simply reversed Friday night’s sharp rally which was triggered by a slight fall in the US rig count. But gold and silver are drifting lower while the dollar is a touch firmer. However, FX traders are unlikely to position themselves aggressively ahead of the Jackson Hole Economic Symposium which begins on Thursday. Janet Yellen and Mario Draghi are both scheduled to speak on Friday although both camps have being playing down expectations that they will announce anything dramatic in terms of monetary policy.
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