Weak Chinese and German trade data has done little to affect the markets, which are largely flat. However, with a dollar reversal in the offing, could we see a shift into European stocks?
-
Volatility subdued, 10 years on from financial crisis
-
Dollar selloff shows signs of abating
-
German and Chinese trade takes a turn, yet WTO says not to worry
Fresh off the back of last week’s volatility, we are seeing a subdued start to proceedings this week, with the VIX falling below 10. With this week representing 10-years since the 2007 financial crisis began, it is notable that we are seeing volatility at the lowest levels seen in a decade. That being said, with the Dow having notched ten consecutive daily gains, the lack of major volatility in US markets is not much of a problem as long as markets are moving in the right direction.
Last week saw the dollar index start August off in the green, following on from five consecutive months of downside. The dollar has been responsible for much of the underperformance in European indices, and with tentative signs of a dollar reversal, we could really see stocks begin to pick up in Europe should the dollar begin to strengthen once more.
The morning has been all about trade data, with the two powerhouses of Asia and Europe going head to head, to equally disappointing effect. On the face of it, both German and Chinese trade improved, with their balance of trade improving further. However, this comes as a result of a disproportionately larger fall in imports than the drop in exports. Certainly a fall in imports and exports across two of the biggest industrial nations in the world is not a particularly bullish sign, yet according to yesterday’s latest World Trade Outlook Indicator, the WTO suggests that global merchandise trade growth will continue to strengthen in the Q3.
Ahead of the open we expect the Dow Jones to open 13 points lower, at 22,105.
This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regards to past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD trades weak below 1.0800 amid Good Friday lull, ahead of US PCE
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair keenly awaits the US PCE inflation data and Fed Chair Powell's speech for fresh hints on next week's price action.
GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
GBP/USD trades sideways above 1.2600 amid a typical Good Friday trading lull. A broadly firmer US Dollar could keep any upside attempts limited in the pair ahead of the US PCE inflation data and Fed Chair Powell's appearance.
Gold price sits at all-time highs above $2,230, US PCE eyed
Gold price hit all-time highs at $2,236 on Thursday to finish Q1 2024 with a bang. Most major world markets, including the US are closed due to Holy Friday, leaving volatility around Gold price highly subdued. US PCE inflation and Powell are awaited.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.