Markets are due to have a mixed start to the week with a variety of competing factors set to influence moves as the week progresses. China will come into focus first today as talk from officials over the weekend helped buoy optimism after a strong rally in equities on Friday. Other markets look set to a flat to weak start on the back of a weaker close to US stock markets on Friday, US indices finished the week around the same levels that they’d started them but there was plenty of volatility in between and that looks set to continue. The dollar finished the week off of it’s recent highs as currencies rallied against the greenback throughout the trading day on Friday.
Geo-Political factors are once again coming to the fore and the US-Saudi situation will keep investors on their toes in the coming days as will Italy’s budget proposals to the EU later today. There does seem to be a more pessimistic view hanging over global markets at the moment which seems to be leading to a sell on rallies environment when it’s short of fresh impetus with relief rallies on any good news. It does feel like this situation will persist until we get greater clarification on a number of different issues including the ongoing trade issue between the US and China and Brexit in the European space.
Looking ahead to today’s trading and it’s a thin day in terms of fundamental data releases, however as mentioned previously there is plenty of potential news and Geo-Political issues set to hit the wires that could provide more volatility for the markets. There will be plenty of focus on Chinese markets this morning as the market digests Friday’s moves and comments before the London open where Italy’s response to the EU is set to remain front of investor’s minds as well as the on going Brexit saga. The US session is also quiet in terms of data releases but expect the situation between the US and Saudi Arabia to hog the headlines.