We saw another volatile day in financial markets on Friday with the US stock indices managing to claw a little bit of last week’s losses back by the close of business. We’re due a mixed start to the week on the Asian bourses today with market sentiment still relatively fragile after last week’s price action. Oil will be very much in focus over the next few days as political pressure is building on the Saudi’s over missing journalist Jamal Khashoggi, with President Trump joining the debate to advise that the kingdom could face ‘severe punishment’ if it’s linked to his disappearance. Sterling should also remain in focus after it crashed on Friday as news hit the market that a the possibility of a Brexit deal by today is probably very optimistic thinking, negotiations are ongoing so expect volatility to remain.
Investors will take some confidence from Friday’s US recovery but will remain wary as the same factors that contributed to hit markets hard last week are still very relevant at the moment. It does look like an interesting trading week ahead, in addition to a fair amount of tier 1 economic data releases, we have some big players reporting earnings as well as the minutes from the last FOMC meeting.
It’s a quiet start to the day here in the Asian session in term of economic data releases and the same can be said at the start of the London time zone, however we have US Retail Sales number due out early in the New York session and that should provide a strong investor focus for the start of the week. Still expect sentiment flows to continue to dominate market moves, traders will continue to monitor news wires closely as we progress through the day and indeed the week with investors hoping for further recovery whilst preparing for an extended downside move.