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 much calmer start to the day as markets are pretty much adjusting to the coronavirus outbreak situation.
Risk trades are keeping more steady as we see USD/JPY back around 109.00 with the aussie and kiwi also holding their ground amid a firmer Chinese yuan today.
Meanwhile, US futures are up by ~0.5% while we're seeing the bond market also keep more steady ahead of European morning trade. US 10-year yields are little changed around 1.61% at the moment as markets keep the calm.
It's going to be a battle of risk this week and to evaluate whether or not the fears surrounding the coronavirus outbreak are justified. Key tech earnings in Wall Street will also complicate the equation but ultimately, that will be the main theme in trading this week.
I still think it is too early to discount the near-term threat of the coronavirus (to markets, travel, global economy) but there will also be periods where risk will see better days as the uncertainty surrounding the situation continues to grip markets.
As such, I wouldn't view the move back higher in US futures currently as a signal that this is all over. We'll still have to see how things develop over the next few days/weeks.
But in the long-term, it's all about finding value and fading fear. These types of market scares are the perfect play for that.
What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.
