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Some relative comfort for risk trades but sentiment remains rather fragile as the market continues to digest the wall of worries posed by Evergrande/China.
The Fed will steal the focus in the day ahead and any hawkish signals on tapering could drown out any bounce in risk (equities in particular) towards the latter stages of the week.
The dollar smile theory is very much in play and the greenback is smiling rather widely at the moment considering the market anxiety on one end and the Fed likely to hint at tapering later today at the other end.
I don’t expect much to follow in European trading as the market will likely just settle into a bit of slight comfort but be wary of selling at the open in US equities, with the trend from last week having continued yesterday.
That might keep things a little more anxious ahead of the Fed later.
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