The Old Rally In The New Year

It is often the case that markets start a new year with new trends. Fears of a full-fledged military confrontation between the US and Iran made the markets worry last week, but soon the situation returned to the previous course.
Alexander Kuptsikevich
The Old Rally In The New Year

Both sides demonstrate a desire for de-escalation of the conflict, which brought the markets back to the rally. Besides, there were very mild reaction (yet) to the crash of a passenger plane near Tehran. US and Canadian politicians say it possibly done by mistake, i.e. it may not have entailed additional toughening against Iran.

The Nasdaq index passed the 9000 mark this morning, an almost 10% increase over a month.

Oil returned to $65 per barrel of Brent, compared to levels above $70.50 at the peak of fears on Wednesday.

Gold, which jumped above $1600 in the middle of the week, traded at $1548, close to its highest levels since 2013.

Geopolitics got loud at the beginning of the year, but today it should give way to macroeconomic news as US employment data is published. Robust November data has removed much of the fear that the world’s largest economy is slowing down. December data is expected to show growth by 150K-160K, which looks good after a jump of 266K a month earlier.

Another pleasant surprise for the markets from macrostatistics may finally remove all the obstacles for the growth of stock markets. A sharp deterioration in the data may alert the markets, returning doubts about the economy’s ability to record-breaking 11th consecutive year.

For the dollar, the situation looks more complicated. Classically, weak data can cause pressure on the dollar, as it will indicate a softer tone of monetary policy in the coming months. Otherwise, a sharp US growth cooling may be perceived as a warning signal for the global economy. If the demand for safe assets on the world markets returns, the dollar may well get additional demand, developing the growth trend since the beginning of the year. In this case, an important milestone may be the area of Christmas highs at 97.40 for the USD index, as well as the area of 1.1060 for EURUSD and 1.29 for GBPUSD.

This article was written by FxPro
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.