The degree of fear in the market is becoming a huge issue as the massive flight into safe haven assets continues in the early weeks of 2016. The new year may only be a few weeks old but already financial markets are at risk of a meltdown. Traders have come back from their Christmas holidays with fear in their eyes and the bears have clamped their jaws down on the meat of the market and this time they appear to mean business. US economic data continues to confound the belief of the Fed minutes which claim that 4 rate hikes are on the table for 2016. The markets seem to disagree, and is it any surprise when the FOMC has a long history over the past few years of being overly optimistic. So what does this mean for Federal Reserve monetary policy going forward? As we prepare for the new week though we should be on the lookout for China growth data with the bears in control of the market.
There are some significant risk factors to be aware of this week, but very few jump out more so than the China growth data. Coming in the same week of the ECB monetary policy this is sure to mean that volatility will remain elevated this week. However what are the other key factors to keep an eye on?
So many markets are being thrown around by the shifting sentiment and fluctuations of risk appetite. The forex markets are no different and there is a very clear theme that is developing. Richard Perry delves more into what the current themes are and the key implications of this. There is also a technical analysis of the crucial Euro/Dollar major pair and also significant developments in the Aussie dollar. Major equity markets are approaching key crossroads, but what are the levels to watch out for? There is also a more detailed look at the technical analysis of the German DAX and FTSE 100. And where do we stand with the key commodities markets and bonds? Richard also gives a technical appraisal of gold and the all-important chart of Brent Crude oil.