What Have the Markets Taught us last Week?

Last weekend, Whilst protesting in Sicily for the 47 migrants on-board a Dutch rescue ship prevented from docking, I was asked this question. “When do you think they will be allowed to enter?” I answered Wednesday, as with GDP numbers to be released, it seems this will show Italy is now in or on the periphery of recession. So letting them in on Wednesday would be used to take the attention away from this fact. Come Wednesday I received a text confirming my assumption became reality. So has our attention been diverted? Or are we awake to the many trading opportunities created by all of last weeks fundamental news activity.

This was one of many key events which occured in the last few days. So what else have we learned as we enter February and what impact will this have on markets in the month known for Cupid and his arrows of love.

UK

In the UK,  although love arrows have not been flying often especially with issues relating to Brexit. Last week saw Theresa May finally win support in Parliament to amend the previously considered backstop arrangement. This gives her new artillery to attack the EU with, who would prefer avoiding a no-deal scenario.

  • FTSE100

As a result the FTSE had a strong recovery week after being in a bear slide last week. Markets again headed for the 7100 resistance which has held since September of 2018. Trading volumes have suggested that this streak has caused this index to be overbought, however with next week’s super thursday reports from the BOE, could we see this ceiling finally break?

Tradeview-FTSE100-02-05-2019-2

US

Cupid had absolutely no presence in the US in recent months, however with the government shutdown halted for now, markets have begun to recover. As expected, the Fed remained unchanged on rates, however FED chair Powell’s comments, created optimism amongst bulls. This optimism would have grown further on Friday, when the NFP number came in close to double on most forecasted figures of 160k, with 304k the registered number.

  • GBPUSD

These bullish reports from the US caused a previous 2-month hammering of USD by the Pound come to an perceived end. Hitting  but not breaking the $1.32 resistance the market technicals coincided with these fundamentals setting up cable for a bear run in upcoming weeks. Is it time for what went up to come down?

Tradeview-GBPUSD-02-05-2019-2

Europe

Italian GDP numbers showed the the country entered recession. Germany after disappointing in most major economic, somewhat recovered with overall CPI and GDP in the Eurozone coming in as expected.

  • DAX

Essentially the markets ended where they started. Filled with uncertainty, highlighted by technical doji’s being present in the last 4 days. With no big move in this index recently, are we overdue a streak of some kind, to give guidance into how the EU will be positioned post th March 29th exit of the UK from the union.

Tradeview-DAX-02-05-2019-2

Eliman Dambell

 

Eliman Dambell
Bussines Development
edambell@tvmarkets.com