• Last night a Dovish Federal reserved helped spark something closer to a Santa Claus rally, with the S&P 500 rallying around 2% to the close. This morning there’s further good cheers as European markets join the party.
• At the same time, pressure has ease on Russia, a move that has lessened demand for safe havens such as the Japanese yen. As a consequence, the yen pairs rose strongly last night, though are mostly pausing this morning.
• The big exception is the AUD/JPY which is bidding higher as the AUD/USD and NZD/USD rebound.
• The euro continues to show relative weakness, in part due to Germany’s close trade links with Russia. Russia may have stepped back from the brink, but the long term outlook for its economy is uncertain. In addition, the Swiss National Bank surprised many by introducing negative interest rates.
• Gold is enjoying a strong day however, reversing some of Monday’s sell off.
Coming up today: • Coming up today we have UK retail sales at 09.30.
• US unemployment claims follow at 13.30, with Philly Fed manufacturing at 15.00. Trade Idea:
Disclaimer: This financial market report is intended for educational and information purposes only. It should not be construed as investment or financial advice and you should not rely on any of its content to make or refrain from making any investment decisions. The views expressed in this report are those of the author and do not necessarily reflect the views or position of Binary.com accepts no liability whatsoever for any losses incurred by users in their trading. Binary options trading may incur losses as well as gains.
Dovish Fed Turns On Christmas Lights
Morning Report: 9.00 London
• Last night a Dovish Federal reserved helped spark something closer to a Santa Claus rally, with the S&P 500 rallying around 2% to the close. This morning there’s further good cheers as European markets join the party.
• At the same time, pressure has ease on Russia, a move that has lessened demand for safe havens such as the Japanese yen. As a consequence, the yen pairs rose strongly last night, though are mostly pausing this morning.
• The big exception is the AUD/JPY which is bidding higher as the AUD/USD and NZD/USD rebound.
• The euro continues to show relative weakness, in part due to Germany’s close trade links with Russia. Russia may have stepped back from the brink, but the long term outlook for its economy is uncertain. In addition, the Swiss National Bank surprised many by introducing negative interest rates.
• Gold is enjoying a strong day however, reversing some of Monday’s sell off.
Coming up today:
• Coming up today we have UK retail sales at 09.30.
• US unemployment claims follow at 13.30, with Philly Fed manufacturing at 15.00.
Trade Idea:
The Swiss National Bank introduced negative interest rates today to stave off investors looking for safe havens for their cash. While the euro area is hardly in the position to do the same, its own interest rate trajectory could follow the same course, albeit remaining above zero. Greece is still on life support and Germany may need assistance if Russia cash stops flowing.
Therefore we could see further downside for the EUR/USD and a good way to play this is a LOWER trade predicting that the EUR/USD will close below 1.2300 in 43 days time could return 122% if successful.
Disclaimer: This financial market report is intended for educational and information purposes only. It should not be construed as investment or financial advice and you should not rely on any of its content to make or refrain from making any investment decisions. The views expressed in this report are those of the author and do not necessarily reflect the views or position of Binary.com accepts no liability whatsoever for any losses incurred by users in their trading. Binary options trading may incur losses as well as gains.
Summary:
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