Market sentiment analysis:
- Trader confidence remains positive amid a growing belief that an easing of coronavirus lockdowns around the world will lead to improved economic activity.
- However, a ruling by the German constitutional court that could curb the Bundesbank’s bond buying will likely limit the market’s enthusiasm for riskier assets.
Trader confidence hit by German court
Traders are broadly optimistic that an easing of coronavirus lockdowns around the world will lead to a rally in economic growth. However, that optimism is being tempered by news that the German constitutional court has ruled that the Bundesbank must stop buying government bonds under one of the European Central Bank’s stimulus scheme within three months unless the ECB can prove the purchases are needed.
That his hit the Euro in particular, although European stock markets have so far shrugged off the ruling.
EUR/USD Price Chart, 30-Minute Timeframe (May 4-5, 2020)
Chart by IG (You can click on it for a larger image)
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.
If you’d like to learn the main differences between FX and stocks to understand the best market to trade based on your trading style and strategy, read this article in our newly-revamped education section.
--- Written by Martin Essex, Analyst and Editor
Feel free to contact me via the comments section below
