Market Snapshot – Stock Markets Rebound as Risks Subside

Stock Markets Rebound

The stock markets have managed to largely rebound today, both in Asia and also in Europe as well as the risks that dominated the markets last week seem to be died down a bit over the weekend. The tension between North Korea and the US and the war of words between them had led to a bit of panic in the markets and this had led to the drop in the stock markets all around the world over the last week. But there has not been much going on between the 2 countries over the week and this, coupled with the weak CPI data from the US, has helped the stock markets to recover.

Weak Data from US Keeps Dollar Under Pressure

The weak CPI data meant that the Fed is likely to be forced to delay the next rate hike and this is generally liked by the markets as it ensures that the funds continue to flow into the stock markets and dont get moved into other assets. This weak CPI data has led to a bout of weakening in the dollar though the trading in the various currency pairs has been choppy with no specific direction. It is the first day of the week when the liquidity is generally low and hence the pairs tend to get pulled this way and that and thats why we are seeing some choppy action in the markets so far. We have to see how the US markets react to the goings on (or the lack of it) over the weekend and that should then determine the short term direction.