Economic news and announcements cause financial markets to move a lot, and may provide some opportunities to trade. So, to help you to earn more with TIQL, we’re sharing this free guide to the markets and dates to watch this week.
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Elections: Who won and what do the markets think?
The weekend’s big election winners were Merkel and English. But for the markets, it all depends on who you talk to.
Some pundits have highlighted that NZD has dropped from a week ago amid fears of weeks of coalition talks with New Zealand First led by Winston Peters. Their tiny 9 seat party has a disproportionate amount of power under the New Zealand system. Other analysts are brushing it off saying the re-election of English means stability for the country, which the markets are going to like.
For the Euro, there has a been a sigh of relief as Merkel holds on to power for a fourth term. Widely seen as the new leader of the free world and with no other European leaders stepping up to vie for the top spot, it’s what the currency and its economic zone needed. Far-right election gains have been a worry here too, but they’re lagging behind in third place.
Anything involving a vote by the general public can cause unexpected havoc as Brexit and Trump proved last year so markets will likely react positively as it seems like business as usual.
GBP: the big interest rate question
When sterling dived after last year’s shock Brexit announcement, the Bank cut interest rates to a record 0.25% but it finally looks like a rise is on the cards . The reason so many see a rate rise before the end of the year is that inflation is edging up to 3% despite stagnant wages and ey-watering levels of personal debt.
The Inflation Report Hearings (26th tbc) will be pounced on by market makers and traders alike as they try to price in their predictions. Keep an eye out for announcements. Current Account details (29th 8.30am GMT) will either have traders diving for their own Brexit or consolidating their GBP position.
NZD: Official Cash Rate
Many expect the Bank to keep things steady in the current climate, but some argue the weakening currency and gloomy outlook in housing and construction make a rise before the end of the quarter more certain. Standing at 1.75% many feel the exchange rate is going to be crucial for the future direction of the RBNZ Cash Rate (27th 8pm GMT).
NZD is a volatile currency that tends to react to global forces. Trump and Kim’s war of words will have cautious investors heading back to safer markets, while China’s economy is a hot topic of debate that could push the Kiwi dollar in a number of directions.
War: what is it good for?
The answer to this is obvious to most people. But not apparently Trump or Kim Jong Un who have amped up the verbal spat over the weekend making the threat of actual war loom large, especially over Japan. Unsurprisingly, Prime Minister Shinzo Abe has called a snap election. If things are going nuclear and he gets stuck in the middle, he doesn’t want to be in the hot seat.
The markets don’t usually take kindly to the idea of war, but latest figures suggest they’re not taking it seriously. Stock indices and USD markets usually recognise the consequence of war is brutal and widespread so their lack of reaction to the exchange of threats is strange. Surprisingly, safe haven gold isn’t on the up, and the Dow and S&P500 don’t seem fazed.
If things do kick off then the infrastructure damage can massively impact a nation’s short-term economic viability, costing citizens and governments billions. And this means debt as rebuilding efforts must often be financed with cheap capital. Interest rates are usually suppressed to keep capital costs down and this decreases the value of the currency. Don’t forget that the complete uncertainty of war itself impacts markets on a day-to-day basis as well as the longer-term economic outlook.
If you’re interested in how the latest threat of war could affect the currencies, commodities and markets you play, then Trump’s Twitter feed needs to be on your radar along with Reuters and, of course, your Tiql updates.
Here are the main news events to look out for this week:
- Tuesday 26th September
14:00:00 GMT USD CB Consumer Confidence
16:45:00 GMT USD Fed Chair Yellen Speaks
- Wednesday 27th September
12:30:00 GMT USD Core Durable Goods Orders m/m
14:30:00 GMT USD Crude Oil Inventories
15:45:00 GMT CAD BOC Gov Poloz Speaks
20:00:00 GMT NZD Official Cash Rate
20:00:00 GMT NZD RBNZ Rate Statement
- Thursday 28th September
06:35:00 GMT JPY BOJ Gov Kuroda Speaks
08:15:00 GMT GBP BOE Gov Carney Speaks
12:30:00 GMT USD Final GDP q/q
12:30:00 GMT USD Unemployment Claims
- Friday 29th September
08:30:00 GMT GBP Current Account
12:30:00 GMT CAD GDP m/m
14:15:00 GMT EUR ECB President Draghi Speaks
14:45:00 GMT GBP BOE Gov Carney Speaks
Some Markets to Watch…
BTCUSD: Bitcoin is still caught in the range between $3500 and $4000. This market needs to clear $4100 to get some momentum behind it for the bulls. Any closes below $3500 and we may see a deeper correction to the recent low at $2980 to shake out the week longs.
GBPUSD: We are trading near a key resistance level and top of a parallel channel. A retrace here and the next key level for the bulls is 1.3250. News out this week could see this pair move.
Gold: The shiny metal has found support at the old broken resistance. Buyers have not come in strongly at this point so far; any daily closes below 1294 and we may see a deeper retracement to the 61.8 fib and chart structure around 1264.
Crude Oil: A symmetrical pattern may be playing out here which could see crude testing the 54/55 zone. We’ve broken through resistance and found some buyers above $50. Both $54 and $55 have strong supply candles and we may see the longs cover here and shorts get involved.
Whichever way you think these markets are going to go, you can trade these and other markets from as little as 1 cent with TIQL.
Markets can really move during news events; all TIQL trades come with guaranteed stops to always protect you from losing more than you have invested in a trade.
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