Here are 4 tips for today's trading. This will help you decide where you should invest and what to look for:
1) Greece Votes
The left-wing Syriza party swept to victory in elections on Sunday, fueled by populist anger over years of severe austerity measures in Greece. Syriza has vowed to renegotiate the terms of the country's massive bailouts with the EU and IMF, who have lent Greece €240 billion ($277.8 billion) since 2010.
CMC Markets analyst Michael Hewson said the next few weeks are "likely to be crucial ones where one misstep could well cause Greece to leave the euro."
2) Futures Fall
US stock futures were poised for a soft start to the week. Dow and S&P 500 futures were down by 0.4%. Most major U.S. markets posted losses on Friday, with the Dow Jones industrial average slipping 0.8% and the S&P 500 down by 0.6% -- though the Nasdaq edged up 0.2%.
3) Economics & Earnings
The S&P/Case-Shiller home price index is released at 9:00am ET, and the Conference Board posts its monthly consumer confidence index at 10:00am ET. Microsoft (MSFT, Tech30) will report earnings after the closing bell.
4) International Markets Overview
European markets were mixed in early trading, with France's CAC down 0.1%. Germany's DAX added 0.2% after a survey showed improved business conditions in the largest European economy. Asian markets also diverged, with Shanghai's Composite up 0.9% while Japan's Nikkei index closed down 0.3%.
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What is it? It checks the level of a diffusion index based on surveyed businesses, excluding the farming industry.
It's a leading indicator of economic health - businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment.
When? January 26th at 7:30pm Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the AUD to rise.
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What is it? The Eurogroup coordinates economic policies of the 17 euro area member states, and their initiatives and decisions can have a widespread effect on the Eurozone's economic health.
When? January 26th all day long.
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What is it? It checks the level of a composite index based on surveyed manufacturers, builders, wholesalers, and retailers.
It's a leading indicator of economic health - businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment.
When? January 26th at 4:00am Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the EUR to rise.
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On Thursday, the EUR/USD pair dropped more than 300 pips as European Central Bank president Mario Draghi announced that the European Central Bank is going to launch an “expanded asset purchase program” with combined monthly purchases of 60 billion euros (earlier estimated 50 billion) from March through at least the end of September 2016.
The pair moved all the way to 1.1315 which is the lowest price since September 2013. Since May 2014 when the pair started to decline, the pair has already lost about 20%. The price of the pair already took into the account the upcoming Greek elections which will take place on Sunday. If the elections do not come out as that disappointing for the market, the price might recover slightly up.
Today, pay attention to the German Flash Manufacturing and Services PMI which will be released at 8:30am GMT. The movement is downwards.
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Here are 4 tips for today's trading. This will help you decide where you should invest and what to look for:
1) Transfer of Power
Saudi Arabia is in transition following the death of King Abdullah bin Abdulaziz al Saud. A successor has already been named, and oil market reaction has been muted. Most analysts expect a smooth leadership transition and a continuation of the kingdom's oil policy.
Still, investors will be looking for indications of how Salman bin Abdul-Aziz Al Saud, the new king, intends to wield power in the world's largest exporter of petroleum. The price of oil was up by about 2%.
2) Keep Pumping
Fahad Nazer, a former political analyst at the Embassy of Saudi Arabia in Washington, D.C., said he did not anticipate any "dramatic changes in its oil policy in the short term."
"I think that given the dramatic drop in oil prices, the Saudis might be taking a closer look at their options but if a change is made, it will likely be a function of economics, not because of the change in leadership," he said.
3) Euro is Still Dropping
European markets were higher in early trading, while Asian markets ended the week on a positive note, as investors continued to cheer Thursday's news that the European Central Bank will launch a $1.3 trillion bond buying program in March. The euro continued to plunge, falling to $1.13, and yields on Eurozone government bonds dropped.
4) Earnings and Companies
General Electric (GE) and Honeywell (HON) will report earnings before the opening bell.
Li Ka-shing's Hutchison Whampoa is in talks to pay up to £10.25 billion ($15.4 billion) for mobile operator O2, a deal that would further consolidate the UK wireless industry.
Sony (SNE) said it was postponing the release of fiscal third quarter results because of the cyberattack it suffered last year.
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What is it? It checks the change in the total value of sales at the retail level, excluding automobiles.
Automobile sales account for about 20% of Retail Sales, but they tend to be very volatile and distort the underlying trend. The Core data is therefore thought to be a better gauge of spending trends.
When? January 23rd at 8:30am Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the CAD to rise.
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What is it? It checks the change in the price of goods and services purchased by consumers, excluding the 8 most volatile items.
Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.
When? January 23rd at 8:30am Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the CAD to rise.
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What is it? It checks the change in the total value of inflation-adjusted sales at the retail level.
It's the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
When? January 23rd at 4:30pm Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the GBP to rise.
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What is it? It checks the level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.
When? January 23rd at 3:30pm Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the EUR to rise.
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What is it? It checks the level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.
When? January 23rd at 3:00pm Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the EUR to rise.
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Here are 4 tips for today's trading. This will help you decide where you should invest and what to look for:
1) European QE
The ECB is tipped to announce a huge stimulus program that could inject as much as one trillion euros ($1.2 trillion) into the Eurozone economy by the end of 2016. Quantitative easing is the last big weapon left in the ECB's arsenal and most experts say its deployment is long overdue. The euro was steady early Thursday buying $1.16.
2) Earnings & Economics
Verizon (VZ, Tech30) and Southwest Airlines (LUV) are due to report earnings before the opening bell and Starbucks (SBUX) issues its results after the close. It's a light day for economic data, just the US government's weekly jobless claims due out at 8:30am ET.
3) International Markets Overview
European markets were moving higher in early trading, while Asian markets ended with gains. The Shanghai Composite extended its recent strong run, closing up 0.6%.
4) Market Recap
It was an upbeat session for US markets Wednesday. The S&P 500 rose 0.5%, the Nasdaq added 0.3% and the Dow Jones industrial average put on 0.2%.
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On Wednesday, the EUR/USD pair tried to break out up, however the sharp movement up was immediately pushed back below 1.1600.
We can explain this jump on the pair as an attempt of the market to get the price higher before today’s European Central bank press conference where is widely expect that ECB will increase its QE to support ultra-low inflation.
The question right now is whether the price will go further down to its 11-years low, or it will return slightly up as market already priced in the worse scenario.
The press conference is taking place at 1:30pm GMT which is 45 minutes after they will announce a minimum bid rate. We expect very high volatility during these hours! The movement is sideways.
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What is it? It checks the level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.
When? January 22nd at 8:45pm Eastern Time.
Trading Tip: If the actual higher is lower than the forecast, you can expect the CNY to rise.
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What is it? It checks the number of individuals who filed for unemployment insurance for the first time during the past week.
Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy.
When? January 22nd at 8:30am Eastern Time.
Trading Tip: If the actual number is lower than the forecast, you can expect the USD to rise.
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What is it? The press conference is about an hour long and has 2 parts - first a prepared statement is read, then the conference is open to press questions. The questions often lead to unscripted answers that create heavy market volatility. The press conference is webcasted on the ECB website with a slight delay from real-time.
It's the primary method the European Central Bank uses to communicate with investors regarding monetary policy. It covers in detail the factors that affected the most recent interest rate and other policy decisions, such as the overall economic outlook and inflation. Most importantly, it provides clues regarding future monetary policy.
When? January 22nd at 8:30am Eastern Time.
Trading Tip: If the announcement will hint towards higher interest rates, you can expect the EUR to rise.
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What is it? It checks the interest rate on the main refinancing operations that provide the bulk of liquidity to the banking system.
Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.
When? January 22nd at 7:45am Eastern Time.
Trading Tip: If the actual number is higher than the forecast, you can expect the EUR to rise.
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