Global financial markets are set to start the week in a positive frame of mind as talk around the crucial US-China trade situation remains positive with President Trump advising that talks are going well and he may be meeting President Xi in Vietnam towards the end of the month. Also adding support was a big surprise to the topside for Non-Farm Payrolls numbers on Friday night, although the unemployment rate crept up a notch and wages data disappointed. US markets had a mixed finish to the week with the Dow and S&P managing a positive day whilst the Nasdaq fell slightly after a lower sales forecast from Amazon. The dollar closed slightly stronger but still has some way to go to recover the drop after last weeks Fed meeting, Dxy currently trading around 95.60.
It should be an interesting week ahead for global markets, we’ve got some decent tier 1 data due out along with a couple of major central bank meetings as well as a continuation of earnings reports. Investor sentiment will continue to be a key driver and over the last few sessions we’ve had little in the way of real fresh impetus on either the global trade situation or Brexit, this is unlikely to continue and traders will be preparing for more volatility on any developments. Investors will be watching news wires closely as the week progresses and will be fully aware that despite positive comments from the US side on trade discussions, we’ve heard little from Chinese delegates and most US dialogue especially from the President tends to come with a tariff caveat.
Looking ahead to today’s trading and it’s likely to be a relatively subdued start to the Asian session with the Chinese market as well as several other SE Asian centres closed for the New Year holiday. It’s very thin on the ground across all the sessions today in terms of fundamental economic data releases and so expect sentiment to dictate market direction as well as earnings reports later in the day.