Three factors, one way: Markets are going down.
Good Morning traders,
European markets opened with stocks very low, down, more than -1 percent. FED, OIL and China data, they are taking the market to a fall.
Asian markets are a bit rattled this morning because Chinese exports fall a shocking 10 percent in September, rattling Asian markets, as the trade data shows weak demand at home and abroad. The weak trade data fuelled a broader risk-off move. Some analysts said the soft data also raised concerns that China may pursue a weaker currency policy in the coming months, stoking deflationary pressures for the rest of the region at a time when corporate earnings’ growth has slowed.
Meanwhile the minutes from the September FOMC meeting have showed that several Fed policymakers moved closer to a rate hike. Many members thought raising rates would be warranted “relatively soon” if the U.S. economy continued to strengthen, but internal divisions remained over the timing of the next move. A few participants also raised concerns that waiting too long could force the Fed into having to raise rates aggressively to slow the economy. While more dovish officials wanted more evidence that inflation is firming before hiking rates. And the U.S. dollar held near a 7-month high on the back of the minutes as expectations of a December rate hike were reinforced.
And another factor is in the commodities markets where the Oil prices struggled following a 1 percent drop overnight after the Organization of Petroleum Exporting Countries reported its output hit an eight-year high in September, offsetting optimism over the group’s pledge to restrict output.
The agreement reached in Algiers improved oil investors’ sentiment and pushed the price of crude oil above the barrier of $50. But is it not enough to break above the Jun peak. This event triggered another upswing, which closed the bearish gap from Jun 24 and encouraged bulls to further action. Thanks to these circumstances, we saw a rally, which approached the ratio to the red resistance zone based on May and Jun highs. Taking into account the proximity to this important resistance zone, the news from the OPEC and the current position of the indicators we can see that reversal is just around the corner.
Like the rest of the markets, the 3 factors were very negative to the Germany Stocks, but the losses stopped in the level of support at 10.360. Is important to take a look into the Eur/usd, because if these currencies will be still losing power, the DAX could be the stronger index inside Europe today.
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The earning season already started, and we can see a lot of opportunities to trade with that information. Tomorrow Citigroup will show his numbers, the predictions on BPA is drop, but the effects of the FED can be positive, so tomorrow will be a big day for all the financial sector.
Graphics by: www.etoro.com
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