Hi Everyone,
Have you ever had to open an investigation on your boss? How about your bosses boss? How about the leader of the free world?
Rod Rosenstein is expected to be confirmed today as the USA’s new deputy attorney general, where his first task will be setting up an investigation into Donal Trump’s alleged ties with Russia.
I don’t envy Rod right now. This is really one of those rock and a hard place positions that most people prefer not to be in. If he doesn’t find anything, people will accuse him of collaboration. If he does find some evidence of foul-play, will it be enough to impeach the president?
Good luck Rod. You’re gonna need it.
-Mati
Today’s Highlights
- Focus on China
- Bitcoin at All Time Highs
- Lords Threaten May & Pound
Please note: All data, figures & graphs below are valid as of March 7th. All trading carries risk. Only risk capital you’re prepared to lose.
The Sleeping Dragon
The Dow Jones continued its pullback on Monday and now finds itself below 21,000 points. Donald Trump’s new and improved travel ban is grabbing some headlines as is the repeal of Obamacare. Neither seem to be having much effect on the financial markets but could influence specific sectors when Wall Street Opens this afternoon.
At the moment, investors focus is largely on the world’s other largest economy, China. Several key updates are propping up the China50 and other Asian markets.
The government has released their budget for 2017 along with growth forecasts. They hope to achieve a steady pace of growth with a GDP of 6.5% for the year. For those of you interested in the specifics, here’s a cute video with very traditional Chinese animation: China Budget
China has also published their foreign exchange reserves last night, which came out at ¥3.005 Trillion. Many of you will remember that we were looking at this number very closely a few weeks ago. The fact that it is holding above the 3 Trillion mark is somewhat satisfying and investors can breath easy for now.
One other thing that’s causing stocks to glow red (red is good in China) is a rumor of an intervention. There are whispers in the market at the moment that President Xi will not allow the markets to dip during the critical “democratic” process that he is currently overseeing.
Market Overview
Bitcoin is consolidating near the all-time highs, apparently gaining strength and deciding if it wants to push further. The SEC ETF decision could come out at any moment and alternative investors are particularly aware of this. Get ready for some potentially massive movements.
Gold, on the other hand, is clinging on to its support of $1220 and could be looking to break it, especially if the Dollar continues to gather strength.
Oil, which has been the cause of stock market volatility in the past is a beacon of stability and is firmly in the center of it’s $4 range that it’s been holding since December.
Over in the UK
The British Pound is under pressure at the moment as the Lords continue to threaten May’s March deadline to trigger Article 50.
Today will be the last day for the Lord’s debate. If there are any changes to the bill, it goes back to the Commons for further review. The Commons passed the bill fairly quickly last time, but there is talk that the next time will not be as smooth.
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We can see the GBPUSD falling sharply and now just 200 pips above the red line at 1.2.
Tonight
Today will be rather quiet for economic data but the market is holding at some significant levels and the possibility of breakout seems increasingly likely.
Tonight we’ve got a lot of data out from China and Japan that could help push things along. So be sure to set your stops and limits before going to bed.
As always, let me know if you have any questions, comments, or feedback. I’m always happy to hear it. Have an awesome day ahead!
Best regards,
Mati Greenspan
Senior Market Analyst
