US Market Wrap

It’s shaping up as a huge week on financial markets as volatility remains high as we run into a slew of top-tier data releases.

The SPX finished the week soft, taking losses to around -12.5% for the five-day period. On Friday, losses extended as far as -15.8% before the buyers came late.

This is the same level of selling over a week-long period as we saw during the Lehman collapse, the Great Depression and the Dot.com bubble bursting. 

So the question to ask here is whether this situation is really to those levels or not?

We also saw some very soft data out of China over the weekend with their PMI numbers coming in a record low levels. So clearly there is going to be an economic impact from the coronavirus, but the issue is whether or not we are simply seeing panic selling or a change in fundamentals? I would suggest this is panic selling.

Weekly Agenda

We have a busy week of data ahead, focused on central banks and the US election and of course, the US jobs report.

We will see a host of Fed speakers this week as the odds of a rate cut grows. The FOMC has been holding steady with a wait and see approach, however, Jerome Powell has made it known that he is prepared to cut rates if required.

At the same time, the US jobs situation has been strong, but there are, of course, worries that the coronavirus will start to hit the economy, even though the cases in the US have been extremely limited.

There are also two central bank announcements this week form the BOC and RBA. There is some chance both will cut rates at this meeting, but we are really still flipping a coin. Despite what the markets might be pricing in. But nevertheless, expect another busy week ahead for the AUD/USD and USD/CAD.

And finally, we must also factor in Super Tuesday, where the Democratic nomination really heats up. There is growing speculation that this sell-off is about the impact that a Sanders win could do to the economy, so that is something to keep in the back of your mind on Tuesday.

Forex Signal Update

The FX Leaders Team finished with 10 wins from 11 trades for a 91% strike rate on the week in what was a stellar performance.

GBP/JPY – Pending Signal

The GBP/JPY has been on the watchlist for a while now and we are still hunting a short. We’ve seen a huge sell-off here so we had the right idea.

SPX – Watching

The SPX has slowed its falls to some degree and as we can see has seen some buying. Monday will be a big day as sentiment will again be driving the trading session.

Cryptocurrency Update

BTC is still on the nose at the moment and the sellers continue to pile in.

The $9,000 level has held and price is starting to make lower highs and is even getting walked down into the $8,500 level. So there is a decent chance of a test of that point in today’s session.

This all began with a big seller who smacked down price off the highs. Since then each really is being sold into which is a sign that the sellers are unwinding some large positions.