China remains key as market sentiment is still under pressure

The move into 2016 has hardly been a happy one for financial markets as sharp selling pressure has seen huge moves lower amidst a flood out of riskier assets and a desire for safe haven trading. Investors have seen Wall Street closing around 6% lower on the first week and there is a big challenge to prevent a negative first month of the year, with the “January Effect” tending to be able to call the direction of markets for the year in over 70% of the time. What has been the major reasons behind the early market weakness this year? It would appear that little has changed over the Christmas break, as China and the concern over the sharp declines on oil being of paramount importance for trading sentiment. We have also had an interestingly mixed Non-farm Payrolls report with a strong headline number but other aspects of the report may not have been so positive. Will this payrolls report have a legacy throughout coming months and how will it impact?

What are the key economic releases that will be crucial for market direction this week, on a week that includes some crucial data for both China and the US? Richard Perry looks into the implications across asset classes in this report. Where do foreign exchange markets sit as the new week begins, what is the outlook and what are the key factors to watch out for? There is also a technical analysis of key forex majors Euro/Dollar and Dollar/Yen. How is the recent market turmoil in Asia impacting on equity markets and what is the ongoing impact on trading sentiment? Also what will be the key factors to watch out for in equities? There is also a technical analysis of two of the major indices, the German DAX Xetra and the FTSE 100.  The report also looks into commodity markets and the outlook moving into this week, whilst the moves on US Treasuries are also very important. The report culminates in a technical analysis of Gold and the US 10 year Treasury yield.