Notícias de mercado & insights

First Quarter Overview - Massive Swings and Volatility in Stock Markets First quarter of the year ended with markets experiencing massive swings and volatility. Higher bond yields, revised inflation expectations and a potential trade war brought fears to the markets, making investors very sensitive to any economic data releases or changes in the markets. Markets were comfortable to the “artificial” low interest rates for a decade.

Higher bond yields rattled the markets as investors realized that the “ era of low interest rates which was created artificially by quantitative easing” is coming to an end. After the financial crisis in 2008, major central banks across the world cut their base lending rates. The below graph depicts the dramatic change in interest rates after the crisis.

With a stronger global economy, central banks have started unwinding the post-GFC monetary stimulus and policymakers are ready to change their stance on interest rates which are putting pressure on the bond markets Traders are in a fragile state of mind as higher interest rates mean that safer bonds are offering greater returns, making risky stocks less attractive. After February’s tumble, stock markets’ volatility soared on the aggressive tariffs stance taken by President Trump. A potential trade war between China and U.S, the world’s two largest economies, are threatening the spectrum of global trade.

Even though President Trump is confident that “trade wars are good and easy to win”, it seems that he is forgetting that history is telling a different story. Markets are swinging between risk off and risk on mode following any tit-for-tat response from the US and China. At the Boao Forum, President Xi’s speech managed to ease some concerns, but investors stay worried as the unpredictability and uncertainty around global trade could put considerable pressure on the markets.

Federal Budget 2018: A Mixed Reaction By Deepta Bolaky Treasurer Scott Morrison handed down his third incorporating tax cuts, superannuation benefits, aged care spending and significant infrastructure spending. The highlight is its plan to hand out $140 billion in tax cuts over the next 7 years possibly making the budget a strong “pre-election” one. It also focused on providing immediate tax relief to the low and middle-income earners by proposing an “offset at the end of the year” effective from 01 July 2018.

The government plans to partly compensate for the loss in revenue from the income tax cuts by taxing illicit tobacco and putting a $10,000 cap on cash payments in an attempt to crackdown on the black economy. The Australian economy entered its 27 th consecutive year of growth and bringing back a budget surplus within the next 2 years appears to be a realistic expectation according to the government. It is also expected that by 2028-29 net debt will decline to 3.8 per cent of GDP.

Source: Business Insider Reactions from the markets so far... Whilst most sectors saw positives out of the proposed measure and policies, it was hard to see the same reaction from the financial sector which makes up almost 30 per cent of the S&P/ASX200 (by market capitalization) after the announcement of a new (proposed) tax on bank liabilities. Consumer discretionary and Consumer staples were mostly positive as tax cuts are expected to boost consumer confidence and spending, seen as favorable for underlying stocks.

Infrastructure and Healthcare also got a lift following the proposed spending plans and policies. No exit fees, a cap on annual fees for superannuation and an overhaul for R&D refunds were understandably drivers of a sell-off in Biotech and Superannuation stocks. Source: Bloomberg The positive sustained reaction from Bond markets is expected to last as the early balance surplus is a quite a crucial factor to consider since it will give support to the country’s AAA credit rating.

The initial impact on the Australian Dollar remains mixed so far. However, it is worth keeping an eye to see how the Budget will unfold over the coming weeks and months.

French elections 2017 With Brexit in full swing, Europe is getting ready for another political event and the people of France are going to decide on who will run their country next. There are four main candidates for the job – Benoit Hamon, Emmanuel Macron, Francois Fillon and Marine Le Pen. Each of the candidates has his/her own views of how France should be moving forward and it will unquestionably have an impact on Europe’s third largest economy.

The candidates Francois Fillon, The Republicans Francois Fillon is the member of The Republicans party and only a few months ago was predicted to win the election. Fillon was previously the prime minister of France from 2007 until 2012. He won his party’s primary last year by 15 points beating the former President – Nicolas Sarkozy.

His plans include scraping the 35-hour working week, removing the wealth tax and cutting half a million public sector jobs. Marine Le Pen, National Front Marine Le Pen is one of the front-runners in this year’s elections, she is the leader of the far-right National Front Party. Le Pen took place in the 2012 presidential election and placed this behind Nicolas Sarkozy and Francois Hollande with 17.90% of the vote.

Her plans include reducing immigration and raising welfare benefits, but her biggest plan is to hold a referendum on the country’s European Union membership and taking them out of the Eurozone. Emmanuel Macron, En Marche Emmanuel Macron is one of the youngest candidates for the presidency and at 39 he has already served as economy minister. He has since started his En Marche movement.

His plans include – greater checks on politician’s powers and has backed deregulation in certain French industries. He also plans to end 35-hour week for younger workers. Benoit Hamon, Socialist Party Benoit Hamon is a member of Socialist Party and the Party of European Socialists.

He became the presidential candidate on January 29 th, 2017 after defeating Manuel Valls in the second round of the party primary. His plans include taxing wealth created by robots and to have a universal monthly payment for French citizens, regardless of their income. What are the polls saying?

Latest poll from Harris Interactive shows Emmanuel Macron (26% of the vote) currently ahead of Marine Le Pen (25% of the vote) for the first round of France’s presidential election. The former front runner Francois Fillon is behind with 20% of the vote and Benoit Hamon in fourth with 13%. Source: Harris Interactive poll Your Watchlist We have seen a steady decline in the EUR over the last few months.

Europe is now facing another political headache and more uncertainty when the French elections take place this year. The two frontrunners – Emmanuel Macron and Marine Le Pen are very close in the polls and have different plans for France. Regardless of who wins the French elections, the EUR will certainly be tested and one to watch.

EURUSD Source:GO Markets MT4 On the Indices front, the CAC40 index has been on the rise in the recent months as you can see in the chart below. The index may not be showing signs of pessimism for the time being. We see a similar pattern on the Euro Stoxx 50.

Will we see a different picture closer to the election and how will the result impact the index? We will find out in the coming months. CAC40 Source: GO Markets MT4 STOXX50 Source: GO Markets MT4 Key dates for the French Presidential election > The first round of the vote will take place on Sunday April 23, 2017. > The two candidates with the most support will go into head-to-head final vote, which will be held on May 7, 2017.

By Klavs Valters, GO Markets

The European Central Bank (ECB) engaged into a €2 trillion bond buying program to promote economic growth and drive inflation up in the Eurozone. It involves buying assets from commercial banks to inject more funds in the banking system. It is a non-standard monetary policy commonly referred as quantitative easing (QE).

The market expected the QE to be phased out by the end of this year. Key ECB policymakers are expressing concerns over a strong Euro which is putting months of challenging work into jeopardy. A strong Euro will directly hurt Germany, one of the largest economy in the Eurozone, as higher export costs will translate into lower demand.

On the other hand, the Pound will eventually benefit from it as euro buyers could switch to pound. The exchange rate has therefore become an issue as ECB is unable to maintain the desired inflation rate. Given the concerns over the strong euro, the market foresees that ECB is less likely to exit from the QE phase.

After more than 2-year high, the EURUSD dropped. The selloff was also due to strong economic US data during the week and the comeback of the tax reforms talks in the White House. [caption id="attachment_58394" align="aligncenter" width="600"] Source: GO Trader MT4[/caption] Mark your calendar!!!! The ECB Monetary policy statement and press conference is scheduled on the 7 th of September 2017.

It will be a key event for the Euro. By: Deepta Bolaky GO Markets

Yesterday, the US Federal Reserve announced the raising of interest rates from to 2.00%~2.25%. Most Fed officials agreed (12 people out of 16) in principle to raise the rate, in line with market expectations, and according to the Dot Plot, the expected interest rate in 2019 & 2020 is 3.2% and 3.6% respectively, which is still 4-5 hikes from today’s level. Although the Dot plot provides the information for the year 2021 as a “long-term” projection, from personal experience, this data is much less important to pay attention to as it is so far away from now.

We all know that the further out the predictions, the more uncertainty it has surrounding it, similar to that of weather forecasts. In summary, if we focus on the pattern of 2018-2020, it still maintains the hawkish trend. Powell's Statement The statement of the Fed maintains optimism about the economy and removes the wording of the easing policy.

For the first time, they deleted the sentence of "The stance of monetary policy remains accommodative, occasion supporting strong labor market conditions and a sustained return to 2 percent inflation" from the original text. That’s also a sign of hawkish movement. Economic Data Forecasts: Most of the numbers remain unchanged compared with June 2018’s prediction, but notably, they adjusted the GDP forecast from 2.8% to 3.1%, which is more optimistic.

We all know that the “balance sheet normalization plan” initiated by the Fed in October last year 2017. The purpose of this plan is to reduce the huge amount of debt back to its “normal” size (i.e., not too far away for the country’s GDP level) Let’s see how it goes up till today: after one year of the reduction process, the total assets (including liabilities) of the US has dropped from nearly $4.5 trillion to $4.2 trillion. Powell Highlights During The Conference About The Stock Market: Powell believes that Equity prices are at the upper band of the historical range.

Although he does not comment on market corrections, he emphasized that high leverage may bring harm. End of Tightening: He said it depends on economic data, including inflation, unemployment rate, and salary growth rate (literally like say nothing). Trade tariffs: Powell is worried about the impact of inflation in the long-run.

While still being observed, it has not affected the US economy in the short term. (It feels like he must say so to avoid confrontation with Trump ) Emerging Markets: Recognizing the importance of emerging markets when the Fed to consider raising interest rates, but he believes that it is only because of the fundamental problems of individual countries that the country's currency is under pressure. Fiscal policy: Worried about the sustainability of fiscal stimulus and believe that budgetary debt will be an inevitable problem in the future. (True, but it seems nobody had any solution for that) Inflation: He emphasized that if inflation unexpectedly rises, the Fed will raise interest rates even faster, but there is no such indication currently. The impact of the trade war on inflation has not yet emerged, and overall inflation is still mainly supported by oil prices. (that’s why Trump is giving pressure to OPEC on twitter recently) By Lanson Chen – Analyst @LansonChen This article is written by a GO Markets Analyst and is based on their independent analysis.

They remain fully responsible for the views expressed as well as any remaining error or omissions. Trading Forex and Derivatives carries a high level of risk. Sources: www.federalreserve.gov,

Upcoming News » 9:00pm BOE Inflation Report - GBP » 9:00pm MPC Official Bank Rate Votes - GBP » 9:00pm Monetary Policy Summary - GBP » 9:00pm Official Bank Rate - GBP » 9:30pm BOE Gov Carney Speaks - GBP » 10:30pm Unemployment Claims - USD » 11:30am RBA Monetary Policy Statement - AUD Eye’s are on the BOE tonight for the rate decision. As with the previous meeting the market is expecting a cut from 0.50% to 0.25%. Expectations were not met in the last meeting with the BOE holding rates.

Based off that I’m not leaning towards any sure thing for tonight’s meeting. Overnight Oil snapped out of this weeks down trend with a 3% counter rally. I’m looking for this to extend further.

Gold and Silver lost ground overnight with Silver continuing to lose further ground today. US Markets bounced back, the US30 put in a second failed low this could be a trend continuation forming. I ‘m looking for more upside tonight to confirm this current pattern.

The EURUSD had a strong move down over night losing 72 pips. It’s sitting on a previous high which could come in as short term support. Today’s Asian session has been mixed for the USD, the AUD has recovered retesting its.7630 high.

The JPY has mainly been weaker but has seen some buyers. It’s currently weaker at this point in the session with pairs making small increases consolidating yesterday's gains. The JPN225 has reversed a low put in earlier and is now posting a strong looking session.

I’m seeing 16020 as short term support. It's showing signs this could be a developing reversal point. The GBP has been in quiet trade as the market awaits tonight's raft of news.

Expect a sharp move up on the GBP if the BOE holds rates for the second time. Due to the upcoming multiple news events, I’m steering clear of the GBP tonight. EURUSD – Two levels shown are the points I’m watching currently.

We did have a strong move down overnight but 1.1134 is presenting as the first point of support. 1.10860 is the next level down. I still see the EURUSD in an uptrend at the moment. Until counter evidence develops I’m looking for support to confirm and a continuation to possibly follow.

US30 – Buy idea filled today. The first sign here for me was the failed low on the 2 nd of AUG. While last night’s recovery can be seen as an inside bar, it also shows a failed low off 18295.

This point now has three tests and three fails at going lower. Divergence has also set up around this support area. These are all good signs we could see a continuation higher to possibly test 18460 if buyer commitment stays strong.

A new move lower that breaks 18245 cancels this buy idea out. There’s one issue present that didn’t make this setup perfect for me. It’s the fact that price is still in a short-term downtrend.

Seeing a break is normally best for trend continuation setups, keep that in mind when looking at future trend continuation trades. XAGUSD – This is a follow up from yesterday’s silver section. Price tried to break 20.64 again overnight.

This attempt failed and sellers took control of the session. Today my sell idea was filled, price has broken its current trend in today’s Asian session. This is the hard part of being in a sell position in an established uptrend.

We don’t know if this is going to be a deep or short reaction. As shown I have sharpened my stop loss and closed part of the position to limit any losses in case we have a snap back to test the new breakout. 20.00 has shown support and has seen buyer interest today. I have a target of 19.96 down to 19.83.

Time will tell if that’s reached or not. Managing potential damage is important once your position is moving in the right direction. If prices get down to 19.37 I would be looking for buyers to reconfirm that support area.

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Written by Joseph Jeffriess, GO Markets Market Strategist