Market sentiment analysis:
- Trader confidence has been hit by the coronavirus outbreak in China but the impact is unlikely to last long.
- While stock markets are easier and some money has flowed into safe havens, risk appetite overall has held up well.
Trading confidence holds up despite virus fears
Traders have moved out of riskier assets such as stocks and into safe havens like gold as the coronavirus has spread. However, the impact on market sentiment is unlikely to last long. While stock markets are weaker, they are still not far from their highs and the effect on gold has been minimal.
Gold Price Chart, One-Hour Timeframe (January 15-21, 2020)
Chart by IG (You can click on it for a larger image)
Elsewhere, US President Donald Trump’s appearance at Davos, his impeachment trial in the US Senate and minor upward forecasts for the Japanese economy by the Bank of Japan have all had little impact one way or the other, leaving the general mood of optimism in place.
In this webinar, I looked at the trends in the major currency, commodity and stock markets, at the forward-looking data on the economic calendar this week, at the IG Client Sentiment page on the DailyFX website, and at the IG Client Sentiment reports that accompany it. You might also like to check out the DailyFX Trading Global Markets Decoded podcasts.
--- Written by Martin Essex, Analyst and Editor
Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex
