Quick recap of last week

Quick recap of last week,

Take profit on NZDUSD hit!

EURAUD is also in a very good profit, we are still holding SP500 sell and USDCAD buy position. 

The USD has a huge week ahead as we have the US Non Farm Payroll and the FED interest rate decision. Expect large moves across currency pairs and US indices. 

Fundamental Analysis

On Friday the US stock market approached record highs again on the news that the first round of the trade agreement is close between US and China. The Volatility index has continued to decline, it appears the market is very quiet. Something could be brewing behind the scenes. 

A couple of questions to think about, why is the US stock market at record highs when the FED in the US is continuing to bail out the banks every night. The US banks do not have enough cash to hold overnight, therefore they are in a continuous cycle of borrowing from the FED. 

Central banks are in a race to cut interest rates due to the negative sentiment globally. Manufacturing PMI is in recession across numerous major economies, and the US bond yield curve has broken back above inversion, which is when a recession unfolds.

VIX

The volatility index is a measure of risk in the market, it is now approaching a level where we have seen a large surge in volatility. 

Increased volatility means, strength in GOLD and strength in the JPY as traders and investors move to safe haven assets. It also generally means a down turn on Indices. 

 

We will be doing a full write up every day this week as there is a huge amount of fundamental data to keep an eye on. 

Any questions on the write ups please let me know,

Kind regards,

Tony Fernandez

Financial Market Analyst