We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • "According to the sample from 2018 upon which FI’s latest mortgage survey is based, the average debt‐to‐income ratio among new mortgage borrowers is 398 per cent"
  • (3/3)...has grown rapidly in recent years. Investors can either invest directly in the loans and access ongoing interest payments or in the bonds issued, with loans that have been packaged as collateral, so‐called Collateral Loan Obligations (CLOs)." https://www.dailyfx.com/forex/fundamental/article/special_report/2019/03/22/Currencies-May-See-Wild-Swings-if-Slow-Growth-Breaks-CLO-Market.html
  • (2/3)...could reinforce the negative consequences in the event of a shock. One sign of increased risk‐taking on the financial markets is that the volume of loans to companies with low credit ratings and/or high indebtedness, so‐called leveraged loans...
  • Riksbank Report - (1/3) "The high level of household indebtedness, combined with the banks’ substantial exposures to the housing market make the Swedish financial system sensitive to shocks. Moreover, the Swedish banking system is large, concentrated and interconnected, which...
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.13% 🇬🇧GBP: 0.05% 🇪🇺EUR: 0.05% 🇨🇦CAD: -0.06% 🇦🇺AUD: -0.13% 🇳🇿NZD: -0.15% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/z9lrYetix4
  • Where #USD has been gaining is on average vs its #ASEAN peers (MYR, PHP, SGD, IDR) as the #EmergingMarkets Index pulled back alongside #tradewar woes, as expected. My ASEAN-Based Dollar Index is at its highest in about 3 weeks - https://t.co/i7kCgnCxVW https://t.co/PfZzLCi9Ls
  • Uhh, couple of disturbances going on right now.... https://t.co/um9oOcujo3
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.89%, while traders in US 500 are at opposite extremes with 80.86%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/rdfOqYK06y
  • #CLP, #BRL and the #ZAR are expected to be the most active Emerging Markets currencies vs #USD with 1-week implied volatilities at 14.48, 12.63 and 11.25 respectively
  • How can you trade #forex after a major release? Find out: https://t.co/sdxcXb8q60 #tradingstyle https://t.co/61ZMqeHYC8
Tech Rattles Risk, Pound Threatens More, Fed Ready to Hike

Tech Rattles Risk, Pound Threatens More, Fed Ready to Hike

2017-06-10 02:25:00
John Kicklighter, Chief Currency Strategist
Share:

Talking Points:

  • After the votes were tallied Prime Minister May lost the majority, making Brexit and the Pound more difficult to negotiate
  • While 'risk' assets ended the week moderately higher, a drop in market leading tech shares Friday rattled sentiment
  • There are four major central banks due to deliberate on monetary policy next week, but the Fed is the top concern

Are you trading Dollar pairs? If so, the Fed rate decision on Wednesday can leverage serious volatility and even trend for the Greenback. Sign up to watch the FOMC decision live with me on the DailyFX Webinar page.

The markets are fighting the quiet slide into the typical seasonal lull in activity. This past week offered up a few jolts of volatility, and the increasingly reactive nature of the market paired with event risk like Wednesday's FOMC decision may permanently revive trading conditions. Through the second half of this past week, the UK election reached a deeper fundamental nerve than what many had anticipated. The second surprise UK vote in a year provided a strong Pound reaction. Prime Minister Theresa May's Conservative party unexpectedly lost seats in Parliament and subsequently lost the majority along with the mandate to drive forward a clear Brexit negotiation position. With a more difficult divorce ahead, the Sterling may find its past months of slow build up can continue to deflate. While there are some Sterling pairs that have notably slid below support (like GBP/USD) others stand at the threshold and look ready for conformation (like EUR/GBP, GBP/JPY and GBP/CAD).

Given, neither the outlook for the Brexit negotiations nor the UK's financial and economic health are any clearer after the vote; it is reasonable to expect the Pound's course is still ahead of it. Another bout of activity that may point to something more systemic ahead was the tumble from US technology stocks through this past Friday's session. Companies like Google, Apple, Amazon and Netflix were champions of risk appetite on the way up; so their about face is concerning. That said, there was a dramatic contrast between the tech-heavy Nasdaq indexes/ETFs and their blue chip counterparts like the Dow Jones Industrial Average (or DIA). The drop in the ratio between the QQQ and DIA Friday was the largest since October 2008. We've see a number of fuses for risk trends fizzle out in the past years, but that doesn't mean we should be any less prepared for the eventual and inevitable turn. The week ahead will again pit the belief that June is consistently the quietest month of the year against the unique circumstances currently facing the markets.

For more specific event risk milestones through the coming week, the monetary policy theme will find considerable exercise. The US Federal Reserve, Bank of Japan, Bank of England and Swiss National Bank will all deliberate on policy. These central banks run the full spectrum. On the one end, we have the BoJ which is arguably the most aggressive dove amongst the major institutions as it remains engaged in an open quantitative easing (QE) program with no viable end date in sight. The SNB is the dark horse where an extremely accommodative stance - a benchmark range of -1.25 to -0.25 percent - has kept it anchored to its Euro counterpart for years. The BoE will have to assess its limited round two QE engagement against the new complications dealt the Brexit and economy after the vote. Yet, it is the FOMC decision that will truly have the market on edge. This event is expected to end with a rate hike - but that is where the bar will be set. The true influence of the outcome will rest with the forecasts which the market show considerable debate through the second half of 2017. Keep tabs on equity indexes, the Dollar Pound and more heading into the new week. We discuss all of them in this weekend Trading Video.

Tech Rattles Risk, Pound Threatens More, Fed Ready to HikeTech Rattles Risk, Pound Threatens More, Fed Ready to HikeTech Rattles Risk, Pound Threatens More, Fed Ready to Hike

To receive John’s analysis directly via email, please SIGN UP HERE

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.