Top 5 Things to Watch on Monday, Jan. 6

© Reuters.  © Reuters.

Investing.com – Fears over the prospect of a conflict in the Middle East are roiling markets, with Brent crude jumping to $ 70 and safe haven gold hitting its highest level in seven years. Global stocks are in the red and in the Euro Zone data has showed that business activity remained close to stagnation at the end of last year. Here’s what you need to know in financial markets on Monday, Jan. 6.

  1. Trump, Iran trade threats

Fears over the fallout from the U.S. killing of a leading Iranian military commander intensified on Monday after Iran said it would no longer abide by the 2015 nuclear deal, meaning it will no longer limit the amount of enriched uranium it holds.

Iran had already vowed to retaliate for the death of Qassem Soleimani who was killed in a U.S. air strike last week. U.S. President Donald Trump has warned of a “major retaliation” if Tehran hits back, deepening a crisis that has heightened fears of a major conflict in the Middle East.

  1. Oil prices continue climb

Oil prices rose again Monday, building on Friday’s more than 3% surge amid fears of a disruption to energy supplies.

climbed above $ 70 a barrel to its highest level since last September — when Saudi Arabia’s Abqaiq oil processing facility was attacked. The global benchmark was last at $ 69.56 at 5:35 AM ET (10:35 GMT), up 96 cents, or 1.4%, from Friday’s settlement.

was at $ 63.77 a barrel, up 72 cents, or 1.1%, after touching $ 64.72 earlier, the highest since April.

  1. Safe havens in demand

prices rose to seven year highs, jumping to $ 1,582 per ounce, the most since since April 2013, while the yen and other safe-haven currencies were also in demand.

The hit a three-month high of 107.77 versus the U.S. dollar overnight and was last at 108.00. The was close to the four-month high of 1.0824 it reached against the euro on Friday.

The greenback was lower against a currency basket, with the sliding 0.2% to 96.28.

Sovereign bonds benefited from the safety bid with yields on Treasuries down at 1.78% having fallen 10 basis points on Friday.

“Iran is almost certainly to respond in some scale, scope and magnitude,” said Lee Hardman, currency analyst at MUFG.

Therefore “market participants are likely to remain nervous until there is more clarity over how geopolitical tensions between the U.S. and Iran will proceed,” Hardman said, noting that geopolitical tensions could hurt global economic growth, especially if the price of oil increases.

  1. U.S. stocks set to open sharply lower

U.S. stock markets are set to open sharply lower on Monday, extending losses from Friday. By 5:35 AM ET (10:35 GMT), were down 171 points or 0.6%. were down 0.6% while were off 0.7%.

Geopolitical tensions along with data showing a larger than expected contraction in the U.S. manufacturing sector in December saw Wall Street’s major indexes pull back from record highs on Friday.

European markets were broadly lower, while Japan’s fell 2% overnight.

The calendar for U.S. economic data and earnings is very light, with just the Purchasing Managers’ Index (PMI) due at 9:45 AM ET.

  1. Euro Zone business activity near stagnation

Euro zone business activity remained close to stagnation in December, a survey showed on Monday, as an upturn in services activity only partially offset a continued decline in the bloc’s manufacturing sector.

IHS Markit’s final euro zone composite PMI edged up to in December from November’s 50.6.

In the U.K., a similar survey showed that the services PMI picked up slightly to hit at the end of the year, indicating that activity flatlined, but businesses reported that optimism rose to its highest level in 15 months.

The report boosted the against the (admittedly) softer U.S. dollar.

–Reuters contributed to this report

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Economy News

Good morning Monday! Early FX price guide 9 December 2019

Welcome to the new forex week, some early indications:

  • EUR/USD 1.1057
  • USD/JPY 108.61
  • GBP/USD 1.3124
  • USD/CHF 0.9911
  • USD/CAD 1.3256
  • AUD/USD 0.6838
  • NZD/USD 0.6561

Not a lot of change from late Friday levels, GBP a few points lower.

Standard caveat on Monday morning markets … market liquidity is very thin as we wait for Asian centres to come on line … prices are liable to swing around on not too much at all, so take care.

I’ll be back soon with a look at the weekend news. 

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Monday morning open – indicative FX prices 25 November 2019

Forex levels to start of the new week. Good morning, afternoon or evening to all ForexLive traders and welcome!

As is usual for early Monday morning, market liquidity is very thin. Times now:

  • New Zealand 7.30am
  • Sydney, Australia 5.30am
  • Japan 3.30am
  • HK & Singapore 2.30am

So, yes, its early in the new week! 

Liquidity improves as Asian centres come on online, until then prices are liable to swing around on not too much at all, so take care.

Maybe its still the weekend where you are and you are still partying. Rock on!

I’ll be back soon with weekend headlines 

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It’s been 90 years since the original Black Monday. The lessons are ominous

A look back at 1929

The period of October 24-29, 1929 was a defining moment in financial world history. Over the course of four trading days, the market fell 25%.

It started with an 11% loss at the open on Thursday, Oct 24 that started a panic. It was halted by the heads of the biggest US banks — Morgan, Chase and National City and the index closed only modestly lower. The buying continued Friday and in the half-day sessions that took place on Saturday at the time.

However it all came apart as news traveled of the rescue over the weekend. On Monday, October 28 the selling and margin calls started. The index fell 13%. The next day it fell another 12% on a volume record that wouldn’t be beaten for 40 years.

From there, the dip buyers stepped in. The market rallied 12% on Wednesday, Oct 30 but they were soon wiped out. A number of bear market rallies extended into April of 2020 when nearly all the losses were recovered. But the market would go on to lose 89% before it bottomed. The peak wasn’t surpassed until November, 1954.

stock crash

Those are all less-important details. What’s still not understood is why the collapse happened. The conventional wisdom is that it was caused by borrowed money and sky-high valuations but that’s just not the case.

As the WSJ highlights, Industrial stocks were priced at about 13 times earnings, down from 15 times in September. The best-performing stock of the year was Radio Corp of America and it peaked at 73x earnings, about the same as Amazon at the start of this week.

That’s what’s so scary about the crash 90 years ago. Even after 90 years of looking, there are no easy answers. There were some obvious mistakes — interest rates were too high, protectionism was rising — but there was something intangible and inexplicable in the mass psychology of the market.

We’ve seen it since in various episodes including the drop in 1987. Even the nearly 20% drop in stocks last December had all the elements of a panic.

So long as people are involved in markets, there will be fear and irrationality. What’s unique about 1929 is that the drop came before one of the worst economic periods in history. What’s less understood is that it wasn’t really the cause or the beginning of the Great Depression. It wasn’t until 1930 and 1931 when banks began to fail that the Depression hit.

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Trade ideas thread – Monday 16 September 2019

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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How Technical Analysis Beat Black Monday

Milton Berg, CIO of Milton Berg Advisors, tells Grant Williams (NYSE:) how his investment process — which focuses on psychology and technical analysis — allowed him to brace for the 1987 market crash. This clip is excerpted from a video published on Real Vision on July 10, 2019 entitled “The Turning Point Master.”

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Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Sports and General News

Note to anyone holding CAD positions: Monday is a holiday

Canadian markets closed on Monday

Monday is Canada Day as the country celebrates 152 year of independence from Great Britain. That means liquidity will be thin and moves could be whippy.

The holiday is one reason why USD/CAD may be unwilling to break down below the January low of 1.3069. It got down to 1.3060 but has quickly bounced to 1.3090.

Monday could end up being a rough day in CAD-land if something notable happens with Trump and Xi at the G20. There’s also the US ISM manufacturing report, which is shaping up to be ugly.

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TRY higher in early Monday trade post Istanbul election

Turkish lira has gained following the weekend election.

  • Opposition has won Istanbul mayor election
  • USD/TRY circa 5.7380

If you are wondering what Istanbul’s mayor impact on monetary policy or pretty much anything to with lira trade … don’t bother. This is sentiment/positioning related – not a positive for Erdogan’s ruling party.

Turkish lira has gained following the weekend election.

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Trade ideas thread – Monday 10 June 2019

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect’s individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.

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ForexLive Asia FX news wrap: USD slid further in Asia Monday

Forex news for Asia trading Monday 3 June 2019

After falling on Friday the US dollar lost a little more ground here in Asia to open the week. The weekend brought no let up in the trade war with China and Mexico. News also hit the White House had considered tariffs on Australia! As the socialists in the White House gain the upper hand with protectionist measures another economic adviser bailed out – White House Council of Economic Advisers Chairman Kevin Hassett will be leaving shortly. How much longer before Mnuchin and Kudlow do the same?

JP Morgan, Standard Chartered, Barclays – all jacked up their forecasts for Federal Reserve rate cuts soon.

As noted, the impact has been a drip lower for the USD. GBP, EUR, AUD, NZD, CAD, yen, CHF all gained against the dollar. EUR/CHF hits its lowest since July of 2017.

Data today was on the weaker side. The Japanese manufacturing PMI dropped into contraction, the South Korean many PMI showed activity slowing at its sharpest in 3 months.

Bitcoin gained over the weekend (chart from earlier, image upload the moment)

Forex news for Asia trading Monday 3 June 2019

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