Highlights
What to Expect
Deutsche Bank (DE:DBKGn) Sinking
Playing the Range
Please note: All data, figures & graphs below are valid as of September 28th. All trading carries risk. Only risk capital you're prepared to lose.
ECB + FED = ?
Markets are eerily calm this morning. There's little movement coming from the currency and commodities markets and most stocks are little changed today. The VIX is reading just 13.10 ahead of the upcoming meetings from the ECB and the FED.
Neither are expected to make any major changes. Both are expected to move the markets. Let's take a look.
USA
In a strange twist of events, Janet Yellen will be speaking first. She'll be testifying to the Committee of Financial Services about boring stuff like regulation and supervision. Janet has already announced her plans last week by indicating a rate hike in December. The markets think she's bluffing though and currently are pricing in a less than 50% chance of that happening.
There will certainly be no major policy changes announced in this speech and focus most likely will quickly shift to the other side of the Atlantic.
Europe
Super Mario Draghi will be speaking at the Bundestag in Germany where we do expect some action. He'll be addressing some of his harshest critics there. German politicians don't like the ultra-loose money policy that Draghi has been implementing for the last couple of years. They don't like the QE and they definitely don't like the negative interest rates.
On the other hand, Draghi also has his own criticisms to hand out. If it weren't for such poor policy that hampers growth he never would have had to make up such crazy policies to begin with.
It'll be interesting to see how he plays this.
Deutsche Bank Sinking
Meanwhile in Germany... Shares in Deutsche Bank have reached a new all time record low of 11.60 per share. This major financial institution is sinking fast after being fined $14 Billion by financial regulators 2 weeks ago for their share of the 2008 financial crisis.
Since then it's been on a downward spiral of fear as investors are pulling their cash. On Monday Angela Merkel announced that the German government will not bail-out the bank, which caused the fear to really set in.
No doubt the shares are very cheap right now and there may be some investors buying this colossal dip. However, the cycle of fear has already begun to spread. Concern has reached the DAX index already and shares in Lufthansa (DE:LHAG) are crashing as well.
Playing the Range
In the meantime, tradersare is counting on no major breakouts in the markets. Two of our biggest trades by volume at the moment are buying the USDJPY and the GBPUSD. As we examined a few days ago, both of these pairs are sitting on major support lines at the moment and eToro clients are expecting them to hold.
This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation.
Past performance is not an indication of future results. All trading carries risk. Only risk capital you're prepared to lose.