The Day So Far
Markets this morning were clearly affected by the horrendous scenes from Paris, and all our thoughts go out to anyone with friends or family that have been impacted in any way. After gapping lower by over 1.5%, European equities have now recovered on the expectation that should there be a reduction in economic confidence as a result of the terrorist attack, the ECB will be quick to step in. Mario Draghi spoke this morning at 10.15 GMT but gave no clues on this however. The flight to safety trades are still apparent, although it can be said that the move in Treasuries on Friday was really started by poor retail sales data out of the US. Crude oil has had a strong morning as you might expect, although this is a very small blip in an overwhelming downtrend – only recovering half of Friday’s move lower so far.
For traders that have not traded a major geopolitical event before, it is prudent to remember that traders can often get caught out, expecting market moves to match the emotional impact of such an event, whereas of course this is rarely the case.
The Afternoon View
Markets are quiet and volumes are light. We do not expect any activity until the 13:30 US Empire State manufacturing data. It will be interesting to see if the US cash market open that at follows at 14:30 can give any further indication of how the weekend’s atrocity might impact valuations, but we really look forward to the CPI and Industrial production data released tomorrow. The FOMC minutes released Wednesday would obviously not have been impacted by the Paris attack, but given that Japan is back in a recession we think Yellen may soon be forced do reverse her reversal of monetary policy communique.
We are short across all risk assets for todays’ session. This includes crude oil which, in the absence of any further development will continue to be driven by the global glut in supply.
Amplify Trading is a Limited company registered in England and Wales. Registered number 6798566. Registered address: 50 Bank Street, 3rd Floor, Canary Wharf, London, E24 5NS. Information or opinions provided by us should not be used for investment advice and do not constitute an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. When making a decision about your investments, you should seek the advice of a professional financial adviser.
Recommended Content
Editors’ Picks
AUD/USD gains ground on hawkish RBA, Nonfarm Payrolls awaited
The Australian Dollar continues its winning streak for the third successive session on Friday. The hawkish sentiment surrounding the Reserve Bank of Australia bolsters the strength of the Aussie Dollar, consequently, underpinning the AUD/USD pair.
USD/JPY: Japanese Yen advances to nearly three-week high against USD ahead of US NFP
The Japanese Yen continues to draw support from speculated government intervention. The post-FOMC USD selling turns out to be another factor weighing on the USD/JPY pair. Investors now look forward to the crucial US NFP report for a fresh directional impetus.
Gold lacks firm near-term direction, remains stuck in a range ahead of US NFP
Gold price struggles to gain any meaningful traction amid mixed fundamental cues. The Fed’s less hawkish outlook drags the USD to a multi-week low and lends support. Bets for a delayed Fed rate cut and a positive risk tone cap gains ahead of the US NFP.
Solana price pumps 7% as SOL-based POPCAT hits new ATH
Solana price is the biggest gainer among the crypto top 10, with nearly 10% in gains. The surge is ascribed to the growing popularity of projects launched atop the SOL blockchain, which have overtime posted remarkable success.
US NFP Forecast: Nonfarm Payrolls gains expected to cool in April
The United States Employment report will be released by the Bureau of Labor Statistics at 12:30 GMT. The US Dollar looks to employment data after the Fed signaled its intention to hold rates higher for longer on Wednesday.