In the aftermath of the Greek elections, life on the side of the markets seems to be fairly calm and it seems that the European equities have come out with very little disruption. The Asian markets give the impression that they too, would do well on the back of the election. A fair increase on some of the Asian stocks is coming in firmer and remaining that way throughout today. Japan’s Nikkei gained 1.4%. The EUR actually gained since it was mostly unaffected by the elections.
Even though bad weather is predicted in New York this week, it does not seem to faze the bullish trend sweeping over the greenback (USD). With the greenback almost nearing an 11 year peak against its major competitors and an almost 11 percent increase in the past three months it appears the USD is standing its ground.
The Federal Reserve will hold its first policy meeting for the year. It is known as the ‘US Federal Open Market Committee’ (FOMC) and this forum is to discuss about the Eurozone, Canada and Switzerland’s new policies. Investors tend to think the Federal Reserve will meet and discuss the global outlook, in the hopes of delivering their promise on tightening of budgets. Even though it is predicted that rates will increase half way through the year, this is still projecting that USD will still continue to gain.
Currencies have also seen a lot of volatility in the past few weeks, this seems to be the future trend that will continue for the next few weeks after the Fed will announce its policy decisions. I predict sharp moves across all major pairs.
Yesterday saw a further drop in the Brent crude after the 12% increase over the weekend this could look even bleaker by this time next week where investors predict this could fall to a low of $30.00 a barrel by the end of February.
Gold may take another turn for the worst after seeing a five month high, this comes about due to the current news surrounding Australian mines. However, I forecast that Gold will gain steadily over the next two weeks, due to the Greece not exiting the Eurozone.
Today’s Trading Tip:
I will be “Calling” gold today and setting my expiry at a week from today, I feel confident in the comeback of this precious metal. I continue to “Put” crude and might just “Put” the USD a little later this week.
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