No real surprises emerged from the ECB and BoE on Thursday. The EUR has been trading slightly stronger against the USD in early trading today. Mario Draghi once again admitted that the European economy has serious hurdles ahead. The growing political chaos emerging from the Ukraine and Russia are doing the E.U. no favours. And the escalating news from the Middle East last night and this morning are also going to add to nervousness among investors.
The GBP and AUD have traded lower against the USD. And the JPY has lost value.
The FX market while not outright volatile has certainly been showing that risk appetite has lessened. Backing that statement up are the poor results from the major equity bourses too. While the Shanghai Shenzhen CSI 300 Index turned in a small amount of gains, the Nikkei has stumbled badly on Friday following in the wake of losses from Wall Street yesterday. Going into the weekend with the European sessions and Americans still to pronounce their sentiment, the broad markets are nervous.
Gold has traded higher today and as of this writing is near 1323.00 USD in fast trading. Crude Oil is also slightly up. The Gold/ Crude Oil barometer is a favourite of Digital Markets Advisor and if both commodities are seen going up at the same time in fast trading this is a definite sign that a flurry of activity awaits traders willing to participate. But it also highlights that risk management has to be well thought out and not merely words spoken – risk management needs to be practiced.
German Trade Balance numbers were poor this morning. The U.K. will publish its Trade Balance numbers soon. French Industrial Production was slightly up, but this number will not effect trader sentiment. The U.S. will be quiet with economic news today except for the Preliminary Nonfarm Productivity reports, but again, this report will not do much to existing market psychology.
Geo-political news will continue to be at the forefront today. And news this weekend will certainly continue to develop as Iraq grabs headlines and reactions politically from international players.