Market Snapshot – Stock Markets Turn Lower on Risk Off Mood

Stock Markets Are Lower on Fears

The stock markets around the world continue to slide on risk off mode for the second day today. Yesterday, we saw a very hawkish Draghi help to push the euro higher but the slide in stock began when it became clear that the Trump administration was once again struggling to push through the healthcare reform bill. This has raised concerns on whether there would be a policy paralysis in the US and this is not good news for the markets as it is likely to adversely affect the dollar due to the fact that all the future plans of Trump are also likely to be held up. This concern has spread across the markets and has led to the dip in the Asian and European markets for the second day today and we can expect the same when the US markets open up as well.

Dollar on the Backfoot

The speeches from the various Central bank leaders has helped to keep the volatility in the markets at a very high level despite the fact that it is the last week of the month. Yesterday,we saw Yellen state that the incoming data would be closely watched to see if the data is strengthening which would then warrant a rate hike in the US but she did not commit herself to any fixed time frame for the next rate hike. She also mentioned that some of the stocks looked pretty high which led to a moderate correction in the stock markets and placed the dollar on the backfoot and this theme is likely to continue in the short term.

Gold Prices Stand Firm

Gold prices continued to consolidate and range during the course of the day today, seemingly unaffected by all the happenings around it. This price action is a bit surprising considering the fact that we would have normally expected the gold prices to have moved higher by now due to the general risk off mood in the markets.