Daily thread to exchange ideas and to share your thoughts
Good day, everyone! Hope you're all doing well as we get things going in the European morning session ahead. It's been a calmer start to the day as the market continues to digest the risk meltdown to kick start the trading week.
Risk is still the main focus of the market at the moment and so far there are mixed tones going into European trading, with equity futures mildly higher while bond yields are more tepid. I wonder where have we seen this story before?
However, today may be a bit different to yesterday as investors have to contemplate whether or not the moves over the past two days have gone too far, too fast. As such, there could be room for a potential pause/pullback.
That said, coronavirus developments aren't really getting better outside of China so the worry is that this could trigger yet another torrid day in the market. In my view, it is too early in the day to decide for now and the best one can do is to go with the flow.
But if we do see another risk rout, I'd be mindful of a potentially sharp retracement towards the end of the day or later in the week. Nothing in the market ever moves in a straight line and the recent breakout in gold is a fine example of that.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.
