The Day So Far…

A quiet start to the trading day in what otherwise has been a more lively week as a whole. Trump and his reported relationship with Russia remains the dominant theme with the latest twist materialising last night when a live recording surfaced of a Senate hearing from May 3rd where FBI director James Comey specifically denies there were no obstructions to his investigation. The news did give US equities a further lift last night and counter to earlier this week the Nasdaq outperformed as some of the immediate pressure on the President dissipated. For me what has been more significant has been the fact the House Speaker Paul Ryan and other GOP members have stood by the President and instead looked to deflect attention onto other matters. It is this current stance that leads me to believe that the worst is over, at least for the time being, without the exception of more credible evidence coming to light.

In FX markets, GBP has been the talk of the town after a mini flash crash was observed yesterday evening. Although the move was minor in comparison to the 600+ drop that we saw on October 7th it does once again show how the market is increasingly becoming more susceptible to these one off bouts of algo driven volatility. At present regulation is ill equipped to deal with the sharp end of automated technology and as such this is now just a part of intra-day reality. The take away from this is not being overly exposed at times of low liquidity if holding short-term positions.

GBP flash crash May 18th

The Day Ahead…

Once again I would look to developments on Capitol Hill to dictate proceedings with little in the way of major US economic data to excite. There are however several central bank speakers scheduled, the majority of which are from the ECB (Praet, Coeure, Constancio), so I would remain vigilant as to any hints toward their feelings of EUR/USD being within sight of the weekly high at the 1.12 handle.

That’s it for this week and for those sad enough like me to be following news this weekend, Donald Trump makes his maiden trip abroad since taking the White House in visiting Saudi Arabia on Saturday and then Israel and the Vatican on Monday. Something tells me the next few days might be interesting!

 

 

Anthony Cheung
Anthony is a leading market commentator with over a decade of experience accumulated as Head of Market Analysis at a leading news and analysis organisation, and now a Director of Amplify Trading.