Very Strong but Something Wrong

Today’s Highlights

Stocks Return to Green

Yet there are signs of Safe Trading

Plenty of News Today to Break the Funk

Market Overview

Stock markets around the world have been showing good green gains over the past 24 hours. Investors in China and the United States seem to be incredibly optimistic about the upcoming meeting between Xi Jinping and Donald Trump, despite comments from Trump that it would not be smooth.

North Korea fired further provocation missiles at the Sea of Japan, which should provide Donald and Xi plenty of things to discuss and provide a welcome distraction from Trump’s wild campaign rhetoric. As long as they’re on the same page about how to deal with Kim Jong Un, things like currency manipulation and trade tariffs are less likely to even be brought up.

Meanwhile, the situation in Syria is heating up as chemical weapons were used once again either by Assad or possibly by Russia against rebel fighters. In an attempt to cozy up to Putin Trump has agreed to work with Assad in order to eradicate ISIS. Some say that this is what gave Assad the courage to use chem warfare again but Trump was quick to blame Obama’s policies for getting us to this situation in the first place.

The above-mentioned situations are causing some investor concern. Safe haven assets like Gold and the Japanese Yen have been firming up so far this week.

At the moment, Gold is about $10 away from key resistance (blue line). If it breaks through $1265 an ounce, we could see it a lot higher by the end of the year.

Overall, the markets are in a bit of a Funk. Oil prices continued to forge higher, giving strength to the markets. Yet, developing situations in Syria, North Korea, South Africa, and Turkey remain at the forefront of the global media focus.

No matter, though there are plenty of news items coming out today that could either give the markets a singular focus or add more confusion to the cacophony.

Today’s Agenda

Up first is the UK’s services PMI, coming out at 9:30 GMT. The GBPUSD is currently on edge. A strong support is forming at 1.2420. If that line holds it would certainly be a good sign. However, the highs have been getting lower and a breakout could be very harmful at this time.

In the early afternoon, we’ll get the ADP NFP numbers out of the US that should set the tone for Wall Street trading. Shortly after the opening bell, we’ll hear the ISM Non-manufacturing PMI, which is expected to come out strong.

Crude Oil inventories are expected to show a slight contraction in US stockpiles, something that could strengthen the current narrative that the global oil glut may finally have been capped.

The main event on the calendar today will be the release of the FOMC’s  minutes from their meeting on March 16th, the day they raised the rates. Also in the press is the resignation of Fed member Lacker over an incident that happened in 2012. The details are still fuzzy but the story is just a distraction. All we need to know is that the Fed has lost a hawkish member and a spot will now be open.

Have an awesome day!!

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