Markets cautious
on US - China trade talks
Investors
have entered today’s trading session adopting a cautious stance thanks to
conflicting reports over the progress of high-level trade talks between the US
and China.
Sentiment
was initially boosted following reports of China proposing to purchase $200
billion worth of American goods in a bid to reduce its trade surplus with the
United States. However, appetite for risk weakened on Friday after China’s
Foreign Minister spokesman, Lu Kang,
denied that such a proposal was made. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
With Donald Trump adding his touch
of uncertainty by stating that China and other countries have become “very
spoiled” when it comes to trade, markets may remain cautious over the current
trade talks in Washington. Investors are likely to maintain a safe distance
from riskier assets and flock to safety until more clarity is offered on the
progress of the negotiations.
Dollar remains
king
It has
been an undeniably bullish trading week for the Dollar which has appreciated to
its strongest levels in five months. The story defining the Greenback’s
incredible appreciation continues to revolve around rising US Treasury yields
and positive domestic economic data. With bulls heavily supported by heightened
expectations of higher US interest rates, the Dollar remains king. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
Taking a look at the technical picture, the Dollar Index remains heavily
bullish on the daily charts. A decisive breakout above 93.50 could invite an
incline towards 94.00 and 94.20, respectively.
Currency
spotlight – GBPUSD
Sterling
was mostly depressed this week following the disappointing UK jobs report, that
clouded prospects of higher UK interest rates this year. An appreciating Dollar
has compounded the Pound’s woes, with the GBPUSD trading marginally below
1.3500 as of writing. From a technical standpoint, the GBPUSD remains under
pressure on the daily charts. A breakdown below 1.3470 could open a path
towards 1.3360.
Commodity
spotlight – Gold
The
fact that Gold is poised to conclude the trading week below the $1300
psychological support level confirms that bears have officially won the
four-and-a-half-month-long tug of war. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html
With the Dollar heavily supported by positive economic data and rate hike
expectations, zero- yielding Gold is likely to remain vulnerable to heavy
losses. While geopolitical tensions and uncertainty could offer some support,
price action shows that bears remain firmly in control. Taking a look at the
technical picture, previous support at $1300 could transform into a dynamic
resistance that encourages a decline towards $1280.
Are WTI bulls
back in town?
Crude
oil prices were firmly bullish this week despite the Dollar’s aggressive
appreciation.
While
optimism over rising global demand may have supported oil, price action
suggests that the rally remains driven by geopolitical risk factors. The
looming Iran sanctions are likely to fuel speculation of tighter global supply,
while heightened geopolitical tensions in the Middle East may spark fears of
potential supply disruptions. Although oil could edge higher in the near term,
robust US Shale production has the potential to create some headwinds for bulls
down the road. Taking a look at the technical picture, WTI Crude has scope to
challenge $75 if bulls can secure a daily close above $72.
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