Risk Sentiment Left Hanging In The Balance

Most major stock indices across Europe and Asia are in the red, although US futures are now pointing to gains when trading begins in New York later today.

It remains to be seen whether US equities can prolong its nascent bull market, having climbed by over 20 percent since March 23, as uncertainties remain over how the depressed global economic outlook would ultimately feed into corporate earnings moving forward.

Policy paralysis leaves Euro on slippery slope

The Euro is now weaker by about 0.4 percent against the US Dollar, with EURUSD dipping further below the psychologically-important 1.09 level. The Euro’s weakness is, in turn, allowing the Dollar index (DXY) to reclaim the 100-handle, given that the Euro carries the most weight in the DXY.

Despite holding a 16-hour teleconference, European Union finance ministers are struggling to agree on how best to support the Eurozone economy amid the coronavirus-induced crisis. Such indecision is set to erode investors’ confidence that the bloc can be adequately supported, with the EU now on the brink of facing its deepest recession in its history. Unless concerted government support measures can be rolled out soon, markets may be willing to allow the Euro to explore more of its downside versus the Greenback amid the glaring policy uncertainties.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Monthly Outlook – Webinar Apr 09

Join Global Head of Currency Strategy & Market Research, Jameel Ahmad, Senior Research Analyst, Lukman Otunuga and Market Analyst, Han Tan, for FXTM’s Monthly Outlook webinar to find out. This insightful presentation reveals potential trading opportunities amid the current global recession, and reveals what lies ahead for Gold, Oil, the Dollar and more.

A live Q&A session will follow, providing you with the perfect opportunity to ask our experts your most pressing questions! Don’t miss out on the chance to learn more about how the latest market volatility might benefit your trading!

All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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Risk Management Calculation – Webinar Apr 10

This structured webinar, presented in English, will teach participants the fundamentals of Risk Management calculation and demonstrate how it can be used to manage capital and possibly reduce risk. Robin will also explain how to calculate pip value, and demonstrate how to use mathematical coding in Microsoft Excel. Don’t miss out, sign up today to learn from the comfort of your own home!

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Candlestick Strength Trading Strategy – Webinar Apr 17

Participants will learn how this strategy may help to spot buying and selling pressures on the price chart, as well as discover more about supply and demand. Robin will also teach guests how to identify market direction and to draw Fibonacci levels. Don’t miss out on the chance to discover this fascinating strategy from the comfort of your own home!

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Robin Mazumder is an FXTM Forex Educator, working specifically with Bengali-speaking traders in Bangladesh. He has an MSc Degree in Psychology and over ten years of personal trading experience in both the currency markets and the Dhaka and Chittagong Stock Exchanges. Robin has been teaching the art of Technical Analysis to eager students since 2013. He encourages traders to develop their own simple trading strategies in order to maximise their potential profits. Robin presents webinars and seminars in Bengali, and is also the author of several informative Ebooks on the fundamentals of the foreign exchange market.

Understanding Orders in MT4 – Webinar Apr 08

Designed for both new and intermediate traders alike, this presentation will teach attendees all about the different types of orders one can make and how they can be used. Guests will also learn how to implement orders and take partial profit. Theunis will provide practical examples and demonstrations, as well as answer your most pressing industry questions. Don’t miss out on the chance to learn from one of our experts from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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FXTM Forex Educator Theunis Kruger has always been fascinated by economics, with a particular interest in ‘wave’ formations and how they can be used to forecast and analyse trends in the financial markets. He began to trade personally as a hobby, but his keen insights and aptitude soon paved the path towards a successful career. With a decade of solid trading experience to his name, Theunis now enjoys sharing his forex knowledge with others. He also has experience in real estate and holds a degree in Town and Regional planning, complimenting his passion for securing a healthy financial future.

A Bumpy Road Ahead

Looking at the new daily infected cases and death toll from Spain, Italy, Germany and France, all of those countries seem to be heading into a downward trajectory. Meanwhile, in the US, the governors of New York, Louisiana and New Jersey pointed to cautious signs that the virus outbreak may be starting to flatten.

It saddens me to use a ‘death’ indicator as a financial market tool, but that’s what’s driving investors at the moment. The declining number of deaths registered due to COVID-19 suggests that we are winning the fight against this horrible virus. Total death rates had decreased from 13% at the start of April to 7% yesterday. That’s the first time we have seen a single-digit number since March 14.

The drop in newly infected cases and death toll sparked a sharp rally in equities, with US stocks registering its best day in a fortnight – and its eight best day since the end of the second world war – as the S&P 500 and Dow Jones Industrial Average both rallied more than 7% on Monday. At this stage, markets are repricing the worst-case scenario due to the virus outbreak, but in my opinion, it’s still too early to justify a prolonged move higher.

Investors moving into risk assets at this stage believe that we’re heading into a V-shaped recovery. Attractive valuations, ‘fear of missing out’ and extraordinary stimulus packages also exaggerate the upside moves in prices. However, no one yet knows the exact damage this virus has already done to the global economy, corporate earnings, and what kind of exit strategies countries will follow in the weeks ahead. Without proper treatment or vaccination, lockdowns could be reimposed and the global economy will then continue to suffer. The corporate earnings outlook is also very murky as the dispersion of analysts’ forecasts are near a record high. Hence, the road ahead won’t be a smooth one, especially as investors still need to digest a mountain of negative economic data and possibly many bankruptcies.

In my opinion, the best-case scenario is likely to be a U-shaped recovery and not a V-shaped one. The world post-coronavirus is not going to be the same for a long time to come. Social behaviour needs time to return back to normal which means the service sector will continue to feel the pain. For now, let’s hope that we beat the coronavirus and it becomes just a memory of the past.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Lukman’s Week Ahead: Market Themes To Watch Out For – Webinar Apr 06

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders. Enjoy an expert look at:

• The key themes driving the financial markets
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• How to use the latest FXTM trading signals
• Using fundamental analysis to increase your profit potential
• What to monitor over the coming week

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FXTM Account Types – Webinar Apr 07

Trading Educator Bilal Jafar will translate his years of impressive market experience into practical insights you can use to help make this important decision. Explore the difference between market and instant execution, what causes slippage and requotes, and what you need to know about spreads and commissions. FXTM has a huge range of different account types that cater for every type of trader. Register for this webinar today to find out more! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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Bilal Jafar is a Forex Educator with FXTM. He holds an MBA in Finance from the Institute of Business & Management, Lahore, and has over eight years of experience in the financial markets. He started his journey as a forex trader and also worked in different positions within sales and education. In 2015, he founded and began serving as the Editor of Pak Economy, one of Pakistan’s leading business and financial magazines. After working as a Business Development Manager with FXTM, he then joined the Education department to pursue his passion for sharing his forex knowledge. His diverse experience in sales, media and education gives him an extra edge that helps him better understand traders’ educational needs.

Oil Slips After Delay To OPEC+ Emergency Meeting

Brent Oil started off the week with a 7.8 percent drop as the Asian trading session progressed, while Crude prices slipped back below the psychological $30/bbl level after opening 8.6 percent lower compared to the Friday’s close. Both however have pared losses as the Asian trading session progressed.

The primary goal of the meeting among major producers is to address the collapse in Oil prices, with Brent having shed 48.8 percent so far in 2020, while Crude has a year-to-date drop of more than 55 percent. The delay is raising doubts as to whether Saudi Arabia and Russia can overcome their differences and end the ongoing price war, while trying to rally other members of the OPEC+ alliance towards reducing output. It also remains doubtful whether the US will partake in this coordinated attempt to stem output, even though their participation appears vital to the success of any OPEC+ deal.

Significant supply cuts are needed to try and stabilise the markets, considering that the coronavirus outbreak has severely dented global demand by an estimated 20-30 million barrels per day. People are forced to stay within the confines of their homes, planes are grounded, and factories ordered shut, all of which drastically reduces global demand for the commodity.

A production cuts deal is necessary in order for both Brent and Crude to keep their heads above $30/bbl, and at least put a firmer floor below Oil prices. It is highly unlikely that an implementable output limit at this juncture would send Oil prices soaring to early-2020 levels, given the demand-side decimation due to Covid-19. Further delays to an OPEC+ supply-cuts agreement could see Oil prices unravelling more of last week’s 50 percent gains, as investors’ hopes wane further over OPEC+’s will to stabilize markets amid a global recession.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Coronavirus’ Impact on the Market: Live Analysis – Webinar Apr 06

Curious to learn more about the latest market psychology? Join FXTM’s Trading Educator Theunis Kreuger for a special presentation and live market analysis that will focus entirely on how the virus is affecting the markets. Attendees will learn more about the current economy crisis from both a fundamental and technical analysis perspective. Attendees will also be encouraged to participate and ask Theunis their most pressing industry questions. Don’t miss out on the chance to learn from our expert from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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FXTM Forex Educator Theunis Kruger has always been fascinated by economics, with a particular interest in ‘wave’ formations and how they can be used to forecast and analyse trends in the financial markets. He began to trade personally as a hobby, but his keen insights and aptitude soon paved the path towards a successful career. With a decade of solid trading experience to his name, Theunis now enjoys sharing his forex knowledge with others. He also has experience in real estate and holds a degree in Town and Regional planning, complimenting his passion for securing a healthy financial future.

Ichimoku, Moving Average and Fibonacci Trading Strategy – Webinar Apr 03

This structured webinar, presented in English, will teach participants a trading strategy combining two popular indicators. Perfectly demonstrated step-by-step, this session will teach you how to setup, attach and use these indicators, and – most importantly – how to combine them to identify the prevailing trends in the market from the comfort of your own home. Don’t miss out, sign up today!

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Robin Mazumder is an FXTM Forex Educator, working specifically with Bengali-speaking traders in Bangladesh. He has an MSc Degree in Psychology and over ten years of personal trading experience in both the currency markets and the Dhaka and Chittagong Stock Exchanges. Robin has been teaching the art of Technical Analysis to eager students since 2013. He encourages traders to develop their own simple trading strategies in order to maximise their potential profits. Robin presents webinars and seminars in Bengali, and is also the author of several informative Ebooks on the fundamentals of the foreign exchange market.

Market Turmoil Resumes As Virus Fears Deepen

It seems most of the global fiscal and monetary stimulus measures have been priced in and the things that matter most at this stage are the infection and death rates of Covid-19.

Psychology has a great impact on asset prices, and with more people realizing that the virus could reach them in some way or have already infected someone they know, that’s a good enough reason for explaining why risk assets are unloved.

The upward move in equities we’ve seen over the past week may prove to be a temporary recovery, a dead cat bounce or a bear market rally. Call it whatever you like, but as long as infection rates continue to grow at the current pace, this more or less guarantees weak economic performance going forward and a collapse in earnings.

With global infections likely to reach one million later today and deaths surpassing 50,000, investors are focusing on capital preservation and are looking to return to cash. That suggests another leg lower in equity prices over the next couple of weeks, until investors have a better understanding on how the current crisis will end.

Of course, no one knows with certainty how bad this pandemic will impact global economies and corporate earnings. But it is obvious that corporate buybacks, a major component of the past decade’s bull market, will be missing in 2020 and probably in 2021 depending on how long the crisis persists. These buybacks have been by far the greatest course of demand for stocks since the 2008 crisis.

While some investors may want to take this opportunity of extreme pessimism to begin accumulating stocks, they may soon realize that we haven’t reached the capitulation stage yet. That is when investors surrender or give up trying to recapture lost gains as a result of falling stock prices and is generally considered to be a sign of a bottom in prices.

Today’s US weekly jobless claims release for the week ending March 28 is going to be of more importance than Friday’s non-farm payrolls report. That’s because the NFP will only include data through March 14, so it doesn’t reflect the impact of the last two weeks when millions of Americans filed for unemployment benefits.

Jobless claims may have risen 3 – 5 million in the past week, and we could even see a higher revision of the last week’s 3.28 million print. That suggests April’s NFP may show job losses in 8 digits, which could turn out to be the darkest day ever in the US job market.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Volatility Subsides As Markets Await Next Covid-19 Development

Still, equity markets have calmed down noticeably, with the VIX having declined by 35 percent since its March 16 peak, although it is still more than three times the average over the past five years. That said, investors must remain vigilant against another spike in volatility, as equity markets may be triggered into another sell-off on any signs that the Covid-19 crisis is worsening.

Considering the relatively elevated levels of safe-haven assets, it’s abundantly clear that investors remain cautious over the virus fallout. The Dollar index is not straying far from the psychologically-important 99 level, Gold is trading around the upper-$1500 range, while USDJPY is keeping to sub-108 levels for the time being. Risk sentiment appears to be in a holding pattern at present, awaiting the next major development in the coronavirus outbreak.

Markets cannot afford to ignore warning signs

President Trump’s warning to America to brace for a “very, very painful” two weeks, coupled with his administration’s estimate that as many as 240,000 Americans may lose their lives to Covid-19, is a stark reminder that the coronavirus-induced crisis is still raging in major economies. Although China’s PMI figures released this week mark a return to expansion, investors are still treating such data with caution as the gains in Chinese stocks are not echoed across the rest of Asia. As the saying goes, ‘one month does not make a trend’. With a global recession now being the overarching theme for the year, investors are expected to endure a bumpy ride before they can place firm hopes on the eventual recovery.

Stocks yet to find equilibrium amid expected earnings downgrades

The quest in finding that floor for stocks appears to still have some way to go, given that valuations remain relatively elevated compared to how corporate earnings typically fare amid a recession. Although the S&P 500’s P/E ratio has now moderated to its 50-year average of 17, it’s still higher than the reading of 10 that was registered after the Great Financial Crisis in 2009.

What remains of the stubborn optimism in equities will likely be tested when the next US earnings season gets under way in two weeks. A one-two punch of negative surprises in earnings and a still-rising death toll Stateside should eviscerate misplaced hopes that the recent monetary and fiscal support measures can immediately repair the economic damage left in the wake of the coronavirus.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Sentiment Cautious as Volatile Quarter Comes To An End

The sentiment pendulum has swung between extremes over the past few months, placing investors on an emotional rollercoaster ride as monetary policy bazookas and handsome fiscal packages have struggled to lift global confidence.

Although Asian markets are edging higher this morning following the better-than-expected China data and overnight gains on Wall Street, caution still lingers in the air. Global stock markets are on track for their worst quarter since the global financial crisis in 2008 and could experience more pain in Q2 as economic data from across the world starts to illustrate the negative impact of the virus outbreak.

Pound weakens as UK growth flatlines in Q4

Investors who were looking for another opportunity to attack the Pound were given the thumbs up after the UK GDP second estimate revealed that the economy showed no growth during the final quarter of 2019. Economic growth printed at 0.0% QoQ, while on an annualized basis, growth expanded 1.1% in Q4 matching market expectations.

The road ahead for the Pound remains filled with obstacles and buying sentiment is likely to diminish further, especially after the latest sovereign ratings downgrade from Fitch and lingering uncertainty over Brexit haunt investor attraction towards the currency.

Focusing on the technical picture, GBPUSD is experiencing a technical rebound on the daily charts with prices trading around 1.2300 as of writing. A breakdown below the 50% Fibonacci level, could trigger a decline towards 1.2200 and 1.2050.

Dollar still wears crown

The mighty Dollar is on route to concluding the first quarter of 2020 standing tall against almost every single G10 currency, excluding the Swiss Franc and Japanese Yen.

In times of uncertainty, everyone wants a piece of the world’s most liquid currency. Appetite towards the Greenback should remain supported by the coronavirus pandemic and global recession fears. With caution still in the air, the currency may extend gains ahead of the US jobs report on Friday, which could offer fresh insight into the health of the US labour force.

Commodity spotlight – Gold

Gold is on standby after posting its best week since 2008, as investors await new economic data to access the damage caused by the novel coronavirus outbreak.

The precious metal should remain confined in a narrow $30 range until there is a fresh directional catalyst. Should the Dollar regain its footing on risk aversion and global recession fears, this may hinder Gold’s upside potential. Looking at the technical picture, prices could jump higher towards $1675 if a solid daily close above $1630 is achieved. Alternatively, sustained weakness below $1630 may open the door back towards $1600.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Recession Fears to Keep Dollar Supported, Oil Depressed

With the Dollar-funding crunch easing, given that the Federal Reserve has worked with other central banks to improve the global financial markets’ access to the Greenback, the DXY’s declines appear to have fizzled out.

Demand for King Dollar should remain elevated, as the global economy enters a recession due to the Covid-19 pandemic. This suggests that the easy gains enjoyed by other currencies vs. the USD over recent sessions may have run their course. The US non-farm payrolls due this Friday, along with other global economic indicators to be released this week, will be used by investors to ascertain the potential severity of the economic contraction.

OPEC+ could flood markets on April 1

Brent prices began the week by sliding below the $27/bbl psychological level, while Crude is testing the $22/bbl mark and is trading around its lowest levels in 17 years. Global markets risk being flooded with cheap Oil supply on Wednesday, April 1, after OPEC+ producers are released from their existing supply cuts deal. The quarantine measures across major economies have resulted in an unprecedented plummet in demand, and the global recession should snuff out hopes of a swift recovery in the markets, barring any supply-side interventions by major producers.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

The Moving Average Spring Strategy Applied – Webinar Apr 02

Designed for both new and intermediate traders alike, this presentation will teach attendees how to use this popular strategy on MetaTrader 4 using a variety of time frames on both live and historical live charts. Theunis will also demonstrate how to define good entries and exits, and talk guests through the dangers of over-analysing. Don’t miss out on the chance to learn from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines

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FXTM Forex Educator Theunis Kruger has always been fascinated by economics, with a particular interest in ‘wave’ formations and how they can be used to forecast and analyse trends in the financial markets. He began to trade personally as a hobby, but his keen insights and aptitude soon paved the path towards a successful career. With a decade of solid trading experience to his name, Theunis now enjoys sharing his forex knowledge with others. He also has experience in real estate and holds a degree in Town and Regional planning, complimenting his passion for securing a healthy financial future.

Dollar Crumbles as US Jobless Claims Skyrocket

Nearly 3.3 million Americans applied for unemployment benefits last week which was more than triple the previous record set in 1982 amid the widespread economic shutdown caused by the pandemic. These figures are certainly a shocking reflecting of how badly the coronavirus has hit theeconomy with the pace of layoffs expected to jump as the United States sinks into a recession. Dollar weakness could become a short term theme if economic data continues to paint a gloomy picture, despite the efforts of the Federal Reserve and Senate to promote stability.

Looking at the technical picture, the Dollar Index is under intense pressure on the daily charts with prices trading around 99.90. A solid daily close below this level could open a path towards 99.00.

Commodity spotlight – Gold

Appetite for Gold improved on Thursday after disappointing US economic data weakened the Dollar and fanned fears around the largest economy in the world entering a recession.

The precious metal has appreciated almost 5% since the start of the week and is positioned to extend gains on risk aversion. Technical traders will continue to closely observe how prices behave around $1630. A solid daily close above this point should open a path back towards $1675.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

After a Great Rebound, Now What?

The return to risk has been due to the US Senate’s negotiations of a $2 trillion package designed to cushion the impact of the virus on the US economy, which finally got approved late Wednesday and passed the House overnight.

US stocks recorded their first back-to-back daily gains since February 6, when the index was hovering near its record highs. While such a move may be considered a positive signal to risk assets and welcomed by many, investors need to treat it with caution.

Following Lehman Brother’s collapse on September 15, 2008, US stocks saw similar moves after steep falls. On October 10 of the same year, the Dow Jones Industrial Average rallied from a low of 7,882 to a high of 9,794 in two days. That was a 24% recovery following a 31% decline from September 15th. However, it then took the index 98 more trading days to find the bottom at 6,469, after which the longest bull run in US history occurred.

The $2 trillion package along with the Federal Reserve’s unlimited stimulus plans, and the ECB made a historic announcement overnight that there will be no limits to their QE program, these measures will undoubtedly ease financial conditions for now and prevent a credit crisis. That might also be translated into less volatility in asset classes. But, history tells us it may only offer short-term relief.

Today’s biggest test is likely to be at 12:30 GMT following the release of the weekly initial jobless claims figures. Economist expectations are varying widely, with some anticipating up to four million new claims which would comfortably be the highest on record. This is expected to be just the start of a streak of terrible economic data to come in the following weeks. Depending on how bad the numbers are, we may see a sell-off of the same magnitude in stocks.

At this stage, it doesn’t seem all the bad news is already discounted and the latest rally in US stocks was irrational with the most beaten-up stocks rallying the most, a sign of irrational behavior and not smart stock picking. While the upcoming data in the next two weeks will begin reflecting the economic damage due to the virus spread, investors still need to assess the impact on corporate earnings.

Until we get a clear assessment of the damage to the economy and earnings, it’s difficult to make rational investment decisions. That’s why the most critical factor in this crisis is still when the peak in infections becomes evident and the pandemic ends.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Is This The Turnaround for Global Stocks?

With global stock markets seemingly closer to the bottom than to the top at this stage, investors who have been bruised by the stunning selloff in recent weeks are now desperate for any form of comfort, with the rollout of stimulus packages across the global economy being the likeliest source. Given the Fed’s plans for unlimited quantitative easing, the eagerly-anticipated $2 trillion US economic stimulus package, and Europe’s plans to unleash credit lines to the region, global stocks may be given cause to climb higher still over the near term.

Yet, the immediate efficacy of the broad swathes of support measures remains in doubt, given that the depth and the duration of the supply and demand shocks remain far from certain at this point in time. Hence it is uncertain whether recent advances in the stock markets will stick, considering that investors are still fearing the worst over Covid-19’s eventual toll on the global economy. With the VIX still at its highest levels since the global financial crisis, investors can expect to brave through choppy waters for a while longer.

Dollar moderates but not by much

The Dollar index (DXY) has moderated below the 102 handle, after the Federal Reserve’s announcement over its plans for unlimited quantitative easing prompted broad-based easing in the Greenback. The Fed’s recent efforts to ease the Dollar-funding crunch, after opening up swap lines with more central banks around the world, have also offered some measure of relief for the broader currency complex.

Should Congress pass the $2 trillion US economic support package, that may lead to further waning in the Greenback as risk appetite attempts a comeback. However, persisting fears over a looming global recession are expected to mitigate any near-term declines for the Greenback, considering the refuge that King Dollar offers investors during times of economic turmoil.

Gold’s revival set to kick on

Gold is seeing a resurgence after breaching the psychological $1600 level. The swathes of fiscal and monetary support packages being rolled out around the world has fueled the tailwinds in Gold, as the liquidity-related selloff gives way to a buying spree that’s more corelated with fears of an impending global recession.

Oil’s gains may slip from investors’ fingers

Brent futures continue to be suppressed below $30/bbl, and would require a fundamental revival in order to see a sustained rise. While hopes of a $2 trillion US stimulus packages may offset some of the demand-side concerns, its impact on Oil prices are expected to be limited, considering the risk of global markets being inundated with cheap supplies amid the OPEC+ price war.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Risk Management Calculation – Webinar Mar 27

This structured webinar, presented in Bengali, will teach participants the fundamentals of Risk Management calculation and demonstrate how it can be used to manage capital and possibly reduce risk. Robin will also explain how to calculate pip value, and demonstrate how to use mathematical coding in Microsoft Excel. Don’t miss out, sign up today to learn from the comfort of your own home!

REGISTER FOR FREE

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  • Click ‘Join Now’ on your chosen Webinar
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Robin Mazumder is an FXTM Forex Educator, working specifically with Bengali-speaking traders in Bangladesh. He has an MSc Degree in Psychology and over ten years of personal trading experience in both the currency markets and the Dhaka and Chittagong Stock Exchanges. Robin has been teaching the art of Technical Analysis to eager students since 2013. He encourages traders to develop their own simple trading strategies in order to maximise their potential profits. Robin presents webinars and seminars in Bengali, and is also the author of several informative Ebooks on the fundamentals of the foreign exchange market.