Volatility has been abundant in the marketplace the past twenty-four hours. As Wall Street declined swiftly on Wednesday, Gold followed behind and then began to produce what could be deemed a blood soaked session as the decline began to slow and similar starting values materialized later in the day – meaning that if a trader was not quick enough and was using a large amount of leverage that they may have found their account liquidated upon the next glance. As of this writing the precious metal is around 1716.00 USD, but its dynamic continues to be quick, based on combustible sentiment that is looking for a ‘true’ direction.
The EUR remains at the lower rungs of its short-term values against the USD. While Greece survived yet another political challenge to its austerity measures last night many questions remain for the nation because of popular unrest. And not far behind those troubles are the constant torments surrounding Spain, now Spanish banks are surrounded by whispers that they are likely going to face increasingly difficult days ahead regarding liquidity requirements. Very shortly the ECB will be holding its press conference with Mario Draghi at the helm. While the European Central Bank is not expected to change its core interest rate, questions will mount about the lackluster economic dynamics that are showing no signs of vanishing.
The BoE in the last hour has agreed to stop its current quantitative easing mandate without an extension. This as members of the Bank of England openly questioned the effectiveness of the policy. The U.K. did show some signs of expansion in its last GDP report, but many analysts believe the economy will sink back into minus territory sooner rather than later. The GBP may find some room to add value in the coming hours.
While Wall Street braces itself for a new round of floor trading in the coming hours only two days after President Obama was re-elected, investors will be forced to look at opening values across boards from the major indexes which are testing major support areas. Trade Balance numbers will be released today along with weekly Unemployment Claims figures. Tomorrow Consumer Sentiment numbers will come from the University of Michigan. While some pointed towards a sudden realization that a ‘fiscal cliff’ awaits President Obama and Congress, others certainly could say that yesterday’s losses in share values were a result of doubts that already existed and were merely fanned by the knowledge that a President who is not considered to be the biggest backer of corporate America still resides in the White House.
Digital Markets Advisor expects that the broad markets including forex, commodities, and equities will remain choppy and volatile today and tomorrow.