Daily Alert: For Friday 29th January 2016

Mark Nugent2016 H1, Daily Alert, January 2016

Fundamentals and Sentiment

(Video below.)

The Vix moved in a narrow range today around 22.5. Commodities rose slightly. Oil rose significantly on rumours of a Russia/OPEC meeting to cut oil production by 5%. Later this afternoon the OPEC members quashed the suggestion and oil lost around half of today’s gains. CAD weakened accordingly. Most stock markets where slightly up or down but the Chinese markets again recorded a significant fall of almost 3%. The JPY index weakens as we stay risk on. AUD and NZD rise as CAD falls. We are definately risk ON.

Last night the Fed kept interest rates unchanged and said the labour market was improving and inflation expectations were unchanged from their last statement. The NZ central bank also kept rates unchanged but said “a further depreciation in the exchange rate is appropriate given the ongoing weakness in export prices.” And “Some further policy easing may be required over the coming year to ensure that future average inflation settles near the middle of the target range.” Pretty dovish. UK preliminary GDP was on target.

Critical Trades for this week

USDJPY – a flat day. Slightly in profit.

USDCAD – moves further into loss as oil rises but most of the loss reversed as oil weakened on the fading hope of a Russia/OPEC meeting.

EURUSD – at the top of the channel. Maybe a sell setup forming.

Tomorrow’s Calendar

  • BoJ Monetary Policy statement due – maybe more QE?
  • Eurozone flash CPI.
  • Canadian and US GDP
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