Jan 13


  • BY: Donal Kelly
  • January, 13th, 2016 20:23 +00:00

Good evening,

the weakness of tech giants Google, Amazon and Applet triggered a selloff on US indices, especially on the Nasdaq. The Nasdaq100 is losing 124.9 points at 4,207.03 (-2.86%). The S&P500 made an intraday low at 1,885.8 but now is trading at 1,895.8 (-2.21%).  In case the S&P500 should close below 1,900 the probability to test last year low will increase. Area 1,850 should be considered very important because the US market may develop a trading range or a correction that could bring the index to lose 20% in 1 year. The macro framework is weak not only in China, but also in other countries both in Asia and Europe where the risk  of contagion should not be underestimated. The Nikkei in Japan should open tonight down 2.55%, and the Japanese Yen may slide below last August low in the next sessions. Precious metals seems the preferred choice in a flight to quality trading strategy and Silver (+2.46%) is outperforming Gold (+0.54%).

The UK Brent is trading near 30$/barrel and this level is much below the price traded during the 2007-2009 financial crisis. The commodity is down for the third consecutive month and a short to cover rally may happen soon. However, it seems premature to say that energy commodities have discounted most of the expectations of global growth.

In the FX market,  EurUsd is up 18 pips at 1.0876 (+0.17%) and GbpUsd is unchanged at 1.445. The Aussie dollar is undeperforming the Kiwi dollar when compared against the Greenback and UsdChf is trading 68 pips above the parity.

Tonight traders will be focused on the Australian Unemployment Rate at 00:30 GMT. Tomorrow at 12:00 GMT the Bank of England will release the Monetary Policy Summary and at 12:30 the ECB will release the Monetary Policy Meeting Accounts.

(20:15 GMT)