So we finally leave a tumultuous first month of the year behind us, one which has certainly not too healthy for those with a nervous disposition. Significant swings in risk appetite have characterised such volatile market moves in January with the concerns over the direction of the price of oil and also the prospects of a spluttering Chinese growth engine. This is all increasingly pushing the global central banks to respond. The Bank of Japan has been the latest to react but how do markets react? However, there is little chance for respite with volatility remaining high this week amidst a slew of key economic data in the first week of February.
As we move into the first week of the new month the data comes thick and fast. What have we got to drive markets in a week that culminates in yet another extremely important Non-farm Payrolls report? Will it be a payrolls report that determines whether we see another rate hike by the Federal Open Market Committee in March?
What are the key factors driving the foreign exchange markets this week? Will the Japanese yen continue to weaken and what are the prospects for an improvement in risk appetite. We take a tehnical analysis view of Euro/Dollar and Dollar/Yen. What are the drivers behind the moves in equity markets? The rallies seen across the world’s major indices have improved the outlook considerably, but how sustainable is the move and what is the outlook for equity markets? There is also a technical analysis of key equity indices such as the German DAX Xetra and the FTSE 100. We also consider the outlook in the key commodities such as gold and oil, which have been so crucial recently in driving the outlook for broader market sentiment. Furthermore we also look at the bond markets and the implications for the next FOMC meeting. Finally there is also a technical analysis outlook for both gold and Brent Crude oil.