Morning Commentary: Market Psychology – Never Predictable

Foreign Exchange - Morning Commentary

Market Psychology – Never Predictable

Share this story:
Facebook
Twitter
LinkedIn
Email
Alan Rose
Alan Rose
Foreign Exchange Head Trader
It was not more than a few weeks ago that trade frictions, sanctions, tariffs, etc. had caused markets to go into convulsions. The U.S. dollar strengthened sharply, emerging markets cratered, G7 interest rates dropped on concerns about contagion, and global equities weakened. Today, markets are in a whole new ball game. While well telegraphed by the White House, the imposition of more White House tariffs (10% for now) on Chinese exports and China retaliating, has barely caused a ripple.
 
Chinese and Asian equities reacted surprisingly well to the news with the Shanghai composite index up by 1.82%. G7 interest rates are also higher, and emerging market currencies are mixed with many slightly stronger and just a few weaker (India and Turkey). The potential contagion and ripple effect from heightened U.S.-China trade tensions impacting a global slowdown is almost non-existent today compared to just a few weeks ago. Commodity prices are higher today and commodity linked currencies are leading the way today with the U.S. dollar slightly weaker.
 
As we all have witnessed, market psychology can again turn the other way. Since a few weeks ago, there have been more story lines that emerging markets and currencies have gone too far south and are overdone. In addition, there are more commentaries that the markets are preparing for a long and drawn out trade battle between the U.S. and China with no quick resolution. There is much at stake for both countries politically and economically. The U.S. November elections will be an early indication as to how voters view the Trump Presidency, the economy and the notion that “trade wars are good and easy to win.”
If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133.
Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!
Follow City National Bank on social media:
Facebook Twitter LinkedIn Google Plus YouTube
Investment and Insurance Products:
Are Not insured by the FDIC or any other federal government agency
Are Not deposits of or guaranteed by a Bank or any Bank Affiliate
May Lose Value
This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. The Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.
Unsubscribe from this list  |  Update email preferences
This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list.
Copyright ©2018 City National Bank – All Rights Reserved.
350 South Grand Avenue, Los Angeles, CA 90071
City National Bank is a subsidiary of Royal Bank of Canada.
TERMS & CONDITIONS  |  PRIVACY STATEMENT
Equal Housing Lender
NMLSR ID# 536994 | City National Bank Member FDIC
                                                           

Comments

Popular posts from this blog

Are tax hikes coming?