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Market volatility in a rear-view mirror from 2018, is telling as per our achieves it was indeed,
“A volatile “vendredi” Friday, with half blindfolds for some market participants. Following-up on earlier posts as markets brace for the day’s (11/01/2018) profit-taking global stocks seemed on track positive footing for the weekend. Driven by several factors, partly due to development in the US-China Trade Impasse, which has brought to light adverse results which is contributing to the slowing of global growth and stretching of emerging markyets elasticity”.
One Thousand Eight Hundred and Twenty-Six (1,826) days on (10.01.2023) are tickled by the same players at different causes. As most of the world recovers from the effects of COVID-19 19, China unfortunately is going through dire straits. with some reports estimating over 9,000 COVID related deaths per day. This naturally has led to China adopting stricter regulations to curb the outbreak.
Production/ Manufacturing and business has been upended, aggravating supply chains with price hits aiding global inflation.
The US Fed has not relented in its quest after tighter monetary policy, QT. (Quantitative tapering) & four rate hikes to 4.50% since the beginning of the fiscal year 2022 with two more in the pipelines for 2023.
Global Markets:
Uncertainties, no doubt heightened market gyration with volatility spicing sentiments of an already capricious market. Traditional trading strategies and predictions are completely blown out of the water, as fundamental are changing rapidly with a shortened or elongated time frame. EU shares though after showing indecisive downward trends Thursday (11/01/18), EU open, did not pen out as some analyst thought would. (i.e., stock prices contained). were unable to keep the lid on for too long.
Fast forward to 10.01.2023 global markets is observed seeking to find its centre.
Market participants are eager to appreciate the upcoming WEP World Economic Four in Davos Switzerland while sniffing out hints of scheduled Rate Decision from various Central Banks including the Fed, ECB, BOE, BOJ to name but a few.
Caveats of the effects of the Russian -Ukraine-Nato Protracted conflict is unabated as sanctions on Russia weigh on some commodities likely to prolong lingering effects.
High Five…
Five years later the High Five is obvious.
On Thursday 11th January 2018 Germany/Dax 30: Was seen at 10,935.20 aiming for 11,000 however, the first resistance is set at 10,958.00, Many Analysts think there could be a reversal of trends before it continues to climb again to, if possible, to the 11,000 levels. Downside to current support levels of 10,910 are more realistic. From the time of print 08:10GMT to perhaps 14:00GMT.
Tuesday 10th January 2023 Germany/Dax 30: Was spotted oscillating between 14,736.5 – 14,826.0 bearishly at 11:25am GMT
Italy/MIB40: Which was captured at 19,277.50 slightly down from highs of 19,297.50. with possibility some abrupt sell-off to 19,100.00 in the EU Trading hours this day 1826 day ago was observed dovish between 25,235.00 – 25,375.00
UK/FTSE100: Is trading between 7,686.28 – 7,714.14 although bearish in view. The trajectory of the FTSE 100 has always been pronounced.
High five years ago. Seen very bullish perhaps driven by expectation of the delivery of UK’ GDP at the time. It was spotted at 6,899.8 sliding from 6,909.2. in as much as the asset is set to breach the 7k levels market participants are warrying this would only be a teaser. Today it is obvious that long term trading would have paid off. looking at the 52week trend between 6,707.62 – 7,725.74
US30/DJA: Made a run for it Thursday five years ago, almost taking us to the 24k level. Unfortunately, this was not released closing at 29.953. Today the expectation is for it to get as close as possible to 24k, perhaps 23,994.00 which was the resistance level. After which knee-jerking down to 23,920 was highly plausible. Today the US30/ DJA is observed to have climbed, trending between 33,379.6 – 33,532.9.
As recession cries are heard, protracted geo-political squabbles, drive investors & consumer sentiments. However, with quarterly earnings on tap the market remains exciting for those prepared or planning.
Commodities:
Interestingly the narrative keeps playing familiar tunes. 5 years ago, Oil: Prices were jittery driven by developments between China & US as well as OPEC and Saudi’s efforts to curb slumping price by limiting production and supply. The Saudi Oil Minister was quoted elsewhere to have mentioned seeing Oil price back to $80 bbl. we are not sure if that is Crude oil or Brent. However, these efforts come in as the Saudis reconsider the IPO od Aramco, which is said to be in 2021. Meanwhile WTI Crude Oil was spotted at 52.80 by 08:10GMT from 50.14 heading to 52.83. there after 53.00 and maybe 53.28. Ahead of the day Baker Hughes Rig Count.
Since then, Oil prices fell to support levels near $20 bbl. before surging to $120+bbl. efforts by OPEC + to regulate prices were somewhat effective. However, COVID restriction in China, & US sanctions weighs both on supply & demand. WTI noted swinging between 73.84-75.28 with possible upside to $90 In case China opens up for business as usual or downside to $65.
Gold: This is what we said about gold on Thursday, (11/01/2018) “With the doubts in the market Gold keeps its lustre seen at 1,297.05 by the time of print it is expected to drop perhaps to 1,290 when the trading on the USD resumes. However, upside movement to 1,298.00 is likely by the end of the day”. Today Gold is set to trade between 1,286.80 – 1,295.70 by the time of print it stood at 1,294.55 up 0.58% knee-jerking has not been ruled out.
After 260 weeks run, Gold has rallied to trade between 1,872.15 – 1,881.40 with upside towards 1,950 eminent.
Forex Market:
The Forex markets have had its fair share of Highs & Lows in the past 5 years. each driven by various national fiscal policies, Quantitative Easing/Quantitative Tapering, Rate Hikes etc.
EUR/USD: Behaved as expected on Thursday 11/01/18. At the time of print the pair standing at 1.1530 uptrends to 1.1545 are likely with support levels set at 1.1496. Now the EUR is down versus the USD following the ECB’s reversal on QE. trading between 1.0712 – 1.0752
Similarly, GBP/USD: The GBP was gaining momentum on possible rumours of a postponed Brexit date ahead of the 14 January parliamentary vote. By the time of print they stood at 1.2763 upside to 1.2840 before backing down by mid-day GMT was warranted. In case the deluge of economic data releases due during the day such as Industrial Production, GDP etc. come out exceeding market consensus to the upside, the pair could head to the 1.29 level. If not the down trend to 1.2710 will not be surprising. Simply put Brexit weighed. Years after Brexit & economic stress, the Cable lost some value, trading 1.2110 – 1.2198 as of 11/01/23
USD/JPY: The Greenback & Yen have managed to climb to 131.40 – 132.48 from the apparent weakness seen 260 weeks ago in the USD persisted. allowing the JPY flexes. Set to trade in a tight range between 108.24 – 108.48. by the time of print 08:10 GMT on 11/01/2018 they were caught at 108.30. These changes have led to several monetary approaches by the BOJ & even may have contributed to the assassination of Japan’ PM Abe Shinzo
Green Investment:
Climate concerns are back on the table after the pandemic, some suggest the lock downs/ restrictions aided the environment to recuperate irrespective of one’s stance on the subject investing in the environment could not be underestimated. ESG, is becoming more popular requiring companies & entities to adopt eco-friendly & alternative solutions or approaches which enhance livelihoods.
Clean Energy, Clean Cooking, Water Treatments, Land Reclamation & Rehabilitation.
Related Links:
ABOUT US – The Mercer-Wood Solutions Foundation
https://uk.investing.com/news/economy-news/top-5-things-to-know-in-the-market-on-friday-1422398
Green – Greener Living – Bloomberg
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