News Sentiment & Trump's Effects on the Markets :: 30 Jan 2017
We spent the weekend catching up on Roger Federer’s amazing comeback at the Australian Open and Donald Trump’s amazing decision to restrict entry into the US form a select group of countries.
This had a negative effect on the markets as uncertainty reigns supreme.
The major European indices opened Monday morning to the downside; the worst affected being the FTSE100 and News Sentiment is fully Bearish on this, the CAC40 and the DAX.
Looking at Market Alerts on the FTSE over the weekend, we can see that 4 serious Bearish Hourly Alerts predicted the drop. These market Alerts are generated by rapid shifts in News Sentiment and when we have this many hourly alerts within one day, we take it quite seriously.
Overall the FTSE has been trending down since the middle of the month after an extended Santa Claus rally and, as we said, News Sentiment is very bearish.
We have shown previously that Daily Market Alerts have worked very well in predicting both big and steady moves in the Mexican Peso. Here we have 3 just this month, which correctly predicted the steady weakening of the Peso.
We all now why the Mexican currency is getting weaker and weaker. The new American Populist attitudes are encouraging US corporations to stay within its domestic borders. Ironically, the weak Mexican Peso is making it very attractive for multi-national companies to look at setting up shop there. Let’s see what happens in 2017.
Gold as well, gapped to the upside on the opening based on Global socio-economic uncertainty but the gap was closed quickly and News Sentiment is showing mid Bearish on the precious metal.
If we look at the last 2 months of Gold price action we can see that Daily Market Alerts spotted 3 big moves here as well.
From Japan, early this morning the Retail Sales figures came out worse than expected driving the yen weaker temporarily. We can see a slight downtrend and News Sentiment is very bearish on the Yen pairs.
Tomorrow we have an Interest rate decision and Policy Statements from the Bank of Japan.
As well, we have news affecting the Canadian Dollar with monthly GDP and a statement from the Bank of Canada later.
News Sentiment is neutral right now on most Loonie pairs and the charts are mixed. Check back to see if there are any shifts before trading or follow us on Twitter at @AcuityTrading.
As well, News Sentiment is neutral on most Euro pairs and Mario Draghi is due to speak twice this week, tomorrow in Frankfurt and Thursday in Slovenia, regarding the European Economy.
Looking at the US Dollar Majors, including the USD Index, the markets opened with a weekend gap showing short term dollar weakness but the gap has been filled and the dollar has returned to last week’s levels. News Sentiment is neutral right now on all pairs.
This week we can look forward to US Dollar volatility, not just from Donald Trump’s Twitter account but from tomorrow’s Conference Board Consumer Confidence, Wednesday’s ADP Employment data, Manufacturing PMI and the monthly Interest rate decision which we don’t expect to change.
Both Thursday and Friday we have further Employment data coming out and we will close out the week with US non-Manufacturing PMI.
From New Zealand, we have Employment data out tomorrow and and News Sentiment is neutral against the US Dollar and the Aussie. However, we can see a very Bearish indication on EURNZD even though we are in a Bearish run right now. We could be looking at a reversal from support at $1.47
From London this week we have Manufacturing PMI Wednesday, Construction PMI Thursday followed by lots from the Bank of England including an Interest rate decision with which we don’t expect to see any change. Friday, we continue in London with the UK Services PMI, so check your News Sentiment Indicators ahead of these events.