Markets React to Trump And Tillerson; Carney Joins A50 Negotiations
eToro | Jan 12, 2017 10:39
Today's Highlights
Markets React to Trump And Tillerson
Gold Bitcoin Divergence
Carney Joins A50 Negotiations
Please note: All data, figures & graphs below are valid as of January 12th. All trading carries risk. Only risk capital you can afford to lose.
Trump-quake
Donald moved the markets again yesterday. In this graph we can see the Dow Jones' extreme volatility during the Trump conference.
Trump also targeted the pharmaceutical sector , which sold off during the speech, and again attacked the F35 airplane putting Lockheed Martin (NYSE:LMT) under pressure.
As we mentioned above, the US dollar is now losing ground as there was a distinct lack of details about any fiscal stimulus. Here's the dollar index, which is now testing 101 for the first time since the Fed hiked rates a month ago...
The USD/JPY is also testing 114, if it falls through that the critical support comes at 113.
You go one way, I'll go the other
The weak dollar and general risk off attitude in the markets have given gold a perfect platform to rise higher. As I write to you, the price is crossing $1200 per ounce. Remember, gold reached as high as $1337 on election night so can still be considered low.
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Gold's digital counterpart Bitcoin did not fare so well, plummeting $160 per coin from high to low as the incredible moves on this asset continue. The main source of the sell off is due to several visits from Chinese officials at the main Bitcoin exchanges in China.
These visits of course made some investors nervous since there have been rumors of China banning bitcoin in order to curb capital outflows. However, they have not done any such thing and these visits should probably be seen as a positive step. If the government is trying to get a better understanding of something it doesn't usually mean that they're about to eradicate it.
Bitcoin is now on its major support level that we discussed, just below $775. In this video you can see a full technical analysis of Bitcoin and better understand the pattern.
Carney Joins the Negotiations
Bank of England governor Mark Carney again showed us a bit of his genius yesterday. In his speech before the MPs he warned them of the negative consequences of not procuring some sort of Brexit transition deal.
He was certainly correct when he warned the world of the negative consequences of the Brexit, so please, let's listen this time.
He did however say that these "consequences" would be worse for Europe than they would be for the UK. Thus, giving the UK the advantage in negotiating the terms of such an agreement.
The pound reacted to Carney's speech by first giving a good test to the ultimate lows, but eventually backing off.
What else?
There are plenty of big events coming right up....
The ECB minutes from December's meeting will give us further insight into what their intentions are by reducing the monetary stimulus package, and what Draghi meant when he said we're not discussing a taper?
Unicredit (MI:CRDI) will hold a shareholder meeting today. After being discussed as one of the main benefactors of a huge Italian Bank Bailout, their stock should be watched closely.
Fed members Evans, Lockhart, Bullard, Kaplan, Harker, and even Janet Yellen will all be speaking today!!
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