While investors have given the appearance of being more at ease this morning as Asian bourses have put in positive numbers via the Nikkei and Hang Seng Indexes, traders must remain vigilant and understand that there are plenty of reasons to remain cautious. Short-term traders should watch ranges and their trends selectively and use risk management particularly within FX. Picking your place will be of paramount importance when putting positions on also when traders are trying their luck with equity indexes.
Plenty of opportunities exists when markets are volatile, but for every dollar you think you can gain, you must be aware that you are capable of losing virtually the same amount depending on the amount of leverage you are using. Spanish Unemployment Change numbers will be released shortly, but no miracles are expected. The Construction PMI numbers will come from the U.K. in a while, yesterday’s Manufacturing PMI met its estimate, but Net Lending to Individuals fell short. The GBP did trade lower yesterday, but has shown some gains in early trading today.
The Single Currency remains within its stronger realms. The EUR did pull back some on Monday, but like Sterling thus far today has found takers this morning. While Russia and the Ukraine remain the focus for many investors, traders should be ready for a barrage of surprises as news and rumors swirl. Russia has announced this morning that military training in the eastern region of its country have finished, but this is certainly not the end of the story, meaning that sentiment will shift like trading ranges. The E.U. and States are said to be considering sanctions, but whether this will have any real effect is far from certain.
Gold as of this morning is near 1338.00 which is slightly lower compared to yesterday’s highs. The precious metal has exhibited buying power on the heels of the political instability from Eastern Europe, but traders should keep in mind that a short-term outlook may be best still for Gold which has been within a long-term bear market. Yes bear markets do end, but without the fear that inflation is going to suddenly emerge in a rampant manner, there is little reason to believe that the precious metal is on a one way upwards journey.
There will be little data from the States today, but investors know well that the jobless figures parade begins in earnest tomorrow with the ADP numbers and will grow in stature as the week progresses climaxing with the Non-Farm Employment Change numbers on Friday.