Markets are returning to calm due to the US Labor Day holiday and gold is settling above the 1333 level
With the liquidity very low this time of the year as traders are yet to return to their desks as well as the U.S. being on vacation due to Labor Day, it is no wonder that markets were rather subdued.
The recent missile test, nuclear this time, from North Korea and the resulting 6.3 magnitude earthquake that shook the region has created some unwanted/wanted volatility in the markets and due to low liquidity, that could have been disastrous. Fortunately, though, not much happened in terms price actions which were rather dormant for most of the Asian and European Sessions.
Europe’s Stoxx Europe 600 Index declined, with all industry sectors in the red, after a Monday morning report from Yonhap that Pyongyang is preparing to launch an intercontinental ballistic missile heightened investors’ unease. European equity markets opened lower and stay within a tight range, with tech and banking lagging.
Both USD/JPY and U.S. equity futures fell, but have stayed within overnight ranges and in the case of the Yen, much of the latest gains have been unwound, while European government bonds advanced and Swiss franc led currency gains. The euro strengthened even as economists expect European Central Bank President Mario Draghi to express concern Thursday about the currency’s rise.
In commodities, WTI and Brent crude futures slipping this morning, more notably in Brent as WTI is somewhat supported as several refineries resume activity. RBOB gasoline futures easing after emergency stocks had been released amid early indications that the damage to infrastructure was not as bad as initially feared.
Economic News that was released during the European session was focused mainly on the British side of things with the Construction PMI which came in much lower than expected at 51.1 rather than 52.1 and lower than the previous figure of 51.9 all in all bad for the British Pound.
Labor Day in the U.S. and Canada has put a dent in the market liquidity. Nothing is happening that is going to be of interest with all U.S. shares is closed as well most CFDs are closing early due to the closed market. Don’t expect major announcements during this session as nothing is expected to happen.
The Dollar seems to have lost the recent gains it managed to get over the past couple of days due to the recent Nuclear Test that took place in Pyongyang on Monday Morning/Sunday Night.
EURUSD – Experiencing some positive momentum on the back of the weak dollar as the pair tries to claw itself above the current resistance at 1.1920. Investors are simply waiting for the ECB announcement on Thursday.
USDJPY – The pair has been in a topsy turvy ride as it gapped lower, tried to close, failed, and then rose yet again but unable to beat the 200-EMA on the hourly chart represented by 109.80.
GBPUSD – It can be considered to be one of the worst performers of the G-10 Currency pairs as the bad Economic Data and looming stagnant Brexit Debate is weighing heavily on the British Pound.
AUDUSD – A rather stagnant day with all the Low liquidity that has been going on, the pair is trading near the 0.7960 which is just above the open. The gap due to the increasing tensions was covered during the Asian hours only to find the losses back during the European.
USDCAD – Not much happening in the particular pair as a very tight range is happening with both countries of this pair gone quiet until tomorrow.
Dow Jones – Rather stable trading on the futures index as the spot is simply sleeping for the day with it being Labor Day and all in the U.S.
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***Information contained in this newsletter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making, but merely provides information from the market for its clients as additional information is made available as per the events occurring in the financial markets.
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