There's an incredible meet the players show going on in Washington DC right now. as the United States makes a massive switch. As we go through Trump's top picks for some of the most prominent jobs in the US it's becoming increasingly clear that these people know what they're doing.

The way they react to questions and give their audience exactly what they're looking for is incredible. However, with the candidates trying so hard to please the Senators and Congressmen who are questioning them it's difficult to tell what they really think.

One thing, that's become a hot topic is the South China Sea. Candidates for the positions of Secretary of State and Defence Secretary have made statements that indicate they'll be tough on this issue. But don't worry China, these hearings as flashy as they seem are just window dressing. Soon you'll be dealing with Trump directly. Though I'm not sure how reassuring that thought is.

The Feders

So far three Fed members have proposed that the US Reserve Bank should start selling off some of their overwhelming assets that they've been buying since the financial crisis.

The Head Fed, Janet Yellen, says that the economy is going great and there are no further obstacles to extreme growth. She would now like it if we could all make a switch and stop talking about her and that the Fed could resume working in the background as they did before the financial crisis, like a thief in the night.

If they are able to somehow accomplish both things mentioned above it would be a great feat indeed. If they can both reduce their balance sheet and withdraw from media attention, it would certainly be very good for stock indices around the world.

Markets Overview

Stocks on Europe and Wall Street didn't do so well yesterday and we saw some modest decline in the Indices. Asian markets are performing surprisingly well so far this morning despite some disappointing Trade Balance Data from China.

The US Dollar remains under pressure with the Dollar Index now meeting resistance at 101.50. The USDJPY did spend a significant amount of time below 114 yesterday but is now attempting some sort of recovery. Whether this recovery has any legs should be seen fairly quickly.

Gold also had trouble holding onto its gains. It stayed above $1200 just long enough to grab a few headlines before retreating back as low as $1291 this morning.

Oil fought back yesterday after Saudi Arabia announced their output cuts. However, the failure to reach new highs above $55 is fairly dangerous. The possibility of new Saudi cuts was the one thing holding the price above $50 until now. Now that that card has been played and we're not forging new highs is a bit of a downer. If it doesn't push ahead today it would put a lot of pressure on the price of oil.

The Day Ahead

There's enough economic news coming out today to end the week on a high note.

First up is the UK with a credit conditions survey from the Bank of England, as well as a speech from MPC member Michael Saunders about the UK labour market.

Later this afternoon we'll get retail sales data from the USA. Followed by a speech from Fed member Harker. To top it all off, the US consumer sentiment will be the last big event before the weekend.

Wishing you an amazing weekend ahead!

Author

Mati Greenspan

eToro Cyprus

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