Markets calm as FTSE fails to open

Recession fears are alive and well but Friday is off to a more relaxed start, perhaps a sign that investors already have one eye on their weekend activities after a surprisingly exhausting week.

This week everyone has become obsessed with the inverted yield curve and whether it means we're headed for recession or if it's "different this time". Of course, it's always different this time. Although there are good arguments why "this time" that may actually be true.

The problem we have is that if enough people are convinced, it could become self-fulfilling. The reality is that this is just a trend that has been reliable over the last 50 years or so, rather than having any solid foundation. If Trump and Xi miraculously resolve the trade war tomorrow, are we still headed for recession? I would think not and the curve would adjust to reflect that.

At this stage though, there's probably more reason to have faith in an indicator like to 2-10 inversion than the US and China bringing an end to this unnecessary damaging exercise. Trump is happy to continue to blame the Fed for any evidence of the trade war hurting the US while both sides seem happy to see this through and accept the consequences.

Investors are more relaxed this morning than they've been for the rest of the week but it would be naive to expect it to continue. There's been plenty of whipsaw action this week so to assume today will remain calm may be asking a bit much.

The FTSE failed to open on time on Friday due to a potential trading service issue. Unfortunately, I don't think we can blame Brexit for this one but maybe I'll be proven wrong.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD trades around 1.1100 amid the Italian crisis, ahead of Fed minutes

EUR/USD is trading around 1.1100, in familiar ranges. Italian President Mattarella will explore if a new government can be formed after PM Conte resigned. The FOMC Minutes are eyed later in the day.

EUR/USD News

GBP/USD leans lower ahead of the Johnson-Merkel meeting

GBP/USD is trading below 1.2150, losing some ground. UK PM Johnson will meet German Chancellor Merkel in Berlin after the latter called for finding practical solutions on the Irish backstop.

GBP/USD News

USD/JPY: Bulls re-take 106.50 amid higher S&P futures, Treasury yields

Following a temporary reversal seen on Tuesday, the USD/JPY pair resumes the bullish momentum in Wednesday's Asian trading and regains the 106.50 level, tracking the gains in the US Treasury yields and S&P 500 futures. 

USD/JPY News

Top 3 Price Prediction Bitcoin, Ripple, Ethereum: Critical technical levels cryptos need to overcome after the summer slide

Late August is vacation time in the northern hemisphere – and cryptocurrency bulls may be at the beach as well. Tuesday's slide in prices lacks clear triggers and perhaps shows some fatigue or profit-taking.

Read more

Gold rebounds above $1,500, remains stuck in tight range

After closing the previous day at $1,506, the XAU/USD pair edged lower on Wednesday as the recovering market sentiment made it difficult for the precious metal to find demand as a safe-haven.

Gold News

Majors

Cryptocurrencies

Signatures