Choppy Markets Ahead of ‘Super Thursday’

We saw some whippy moves in the market yesterday ahead of today’s big risk events with the Euro especially volatile with the ECB looming. Various ‘sources’ came out with conflicting stories with regard to the ECB’s rate announcement tonight and which saw some sharp moves down and equally as swift on the way back up. We note that the futures markets are still firmly in the ‘no change’ camp but we could see some similar moves today.

In general the dollar has recovered slightly along with the stock markets and this is largely attributed to details of former FBI Director Comey’s testimony that seem to favour Trump with regard their Russia investigation. It’s only a bit of a relief rally at the moment and we still have a fair wait until the live testimony later today but it does appear that anything that is pro Trump from any blame is being regarded favourably by the market in terms of risk appetite and confidence.

It’s election day in the UK today and voting will start from 7am, but the market volatility start to really ramp up when we start to see the results come in from across the country. We will have the usual assortment of political experts analyzing the results on TV later in the day, but the risk is now with the downside in the sterling, any move towards a hung parliament or a Labour victory will see the currency lower. Conversely a strong Conservative majority as was originally predicted should see Cable back up to recent highs and beyond.

Before we get to the big events later on we have the small matter of the Asian session to trade through, it’s been a fairly quiet start so far as you’d expect with so much event risk ahead but the Chinese Trade Balance data is due this afternoon and this could get things moving early.

There will certainly be some good trading opportunities ahead today and liquidity could be affected if volatility starts to pick up so traders will be adjusting their strategies accordingly to allow them to take advantage.

Rakuten Securities Australia Review