Global stock markets at last managed to have a positive day after a torrid week where billions of dollars have been wiped off the value of the worlds indices. In the US, the S&P and Dow finished up over 1.5% and the Nasdaq closed just shy of 3% in positive territory. The dollar maintained its move to the topside with the Dxy trading just south of yearly highs as we enter the Asian trading day. This move was assisted by more pressure on the Euro after the ECB’s latest meeting with Mario Draghi acknowledging recent market turbulence and Italian financial risks in his press conference. We also heard from the new Fed Vice Chair Richard Clarida last night and he maintained the recent Fed rhetoric with upbeat comments on the US economy.
Despite yesterdays rally in stocks, investors are still wary that further moves to the downside could be coming. After hours announcements from Amazon and Alphabet of slowing growth have done nothing to spur investor confidence and traders will still be cautious as we move through the sessions into the weekend. Currencies will still be closely watched today with several pairs still trading at vulnerable levels with the Aussie and Yuan once again sitting just north of yearly lows as we open the trading day.
Once again sentiment looks set to be the main driver of markets today with little in the way of tier 1 data due out in the Asian and London trading sessions. The Advance GDP data is due out of the US in the New York session and this will give traders a focus early in their day with market expectation sitting at 3.3% for the q/q number. Liquidity may become an issue as we move towards the weekend after this weeks excessive moves and traders will be preparing for sharp moves in the late New York session whilst hoping for a bit more consolidation.