Global financial markets are mixed, influenced by election results in Taiwan, Chinese monetary policy, the U.S. economic outlook, and Middle East tensions.
Interesting levels and price zones in Dax. Graphic M5 and VP Daily. Classic Wedge of technical analysis in formation with decreasing maximums and increasing minimums. Normally it is a continuation figure, but sometimes it transforms into an inversion. It seems to be difficult to break the daily VAH, but as long as prices remain stable above POC and VWAP, shorts are “forbidden”.
Source: Matteo Marchetti, KTM Market Analyst
For all the latest market developments follow Matteo @MMTradingKTM and Key to Markets @keytomarkets on Telegram
The People’s Bank of China’s decision to keep its key policy rates unchanged has surprised markets, diverging from the major commercial banks’ recent move to lower deposit rates. This decision is seen as a strategic maneuver, potentially paving the way for future rate cuts. This development is crucial as China remains a significant player in the global economy, and its monetary policy decisions have far-reaching impacts on international financial markets.
European stock futures are indicating a positive start to the week, buoyed by optimism in Asian markets and a slight weakening of the U.S. dollar. The U.S. markets, however, are closed for a holiday, leaving a temporary gap in the global market dynamics. Last week’s positive close in the U.S. stock indexes, following a decline in early January, suggests a cautious optimism among investors.
The ongoing geopolitical tensions in the Middle East are having a notable impact on commodity prices. Oil futures have risen, reflecting concerns over potential supply disruptions, despite assurances that current conflicts are not significantly affecting supply. Concurrently, gold prices have edged higher, driven by investor uncertainty and a search for safe-haven assets in times of geopolitical instability.
Key US economic data releases, such as retail sales and jobless claims, are on the horizon this week. These indicators will provide insights into the health of the U.S. economy and may influence the Federal Reserve’s approach to interest rates. The anticipation of a Fed rate cut in 2024, alongside a potential slowdown in balance sheet reduction, is a significant point of focus for investors, reflecting the complex interplay between economic data and monetary policy.
The outcome of Taiwan’s election, with Vice President Lai Ching-te’s victory, could ease global concerns about Taiwan-China relations. However, the loss of the parliamentary majority by the ruling party may lead to uncertainties in domestic economic policies and reactions in local markets. This development is of particular interest as Taiwan is a critical player in the global technology supply chain, and any political shifts could have implications for international trade and relations.