Currencies

European data continues to be upbeat

The pair trades at the highest in a more than a month at $1.200. The euro gained 14% against the dollar in 2017 as faster-than-expected euro zone growth fueled expectations that the European Central Bank will tighten monetary policy sooner and faster than anticipated.

The rally is expected to last throughout the month as we expect upbeat results of the overall European Manufacturing PMI. This is now exposed and a break above here will target initially the 1.2168 50% retracement of the move down from 2015 high and then the 1.2414 200-month Moving Average.

Strength in Chinese data supports NZD

Strong NZD is expected against an overall modest dollar movement. NZD/USD rose 0.25% to trade at 0.7123, the highest since October 19. The sentiment around the Kiwi remains lifted on the back of ongoing weakness seen in the US dollar, with the DXY now flirting with three-month troughs of 91.80.

Markets remain wary over the Fed rate hike outlook under Powell’s President and hence, continue to selloff the buck in tandem with Treasury yields. Additionally, an unexpected rise booked in the Chinese Caixin manufacturing PMI data for December also collaborated to the renewed uptick seen in NZD/USD.

Germany a great long term bet

Germany 30 closed the year down as political uncertainty continued to weigh on the markets in Germany. The index closed below the 12900 region for the last trading day last week.

Coming days Germany will witness Markel’s party to form the coalition, the more is the pressure on Merkel to give up and call for new elections. These new elections are likely to give Merkel More chances of clear win or lose to the oppositions parties and in the political and economic circles this is probably the last thing that Germany would want.

The market continues to be a gateway for people who wish to invest in the European Union, and therefore if the EU continues to look strong, and makes sense that eventually the DAX would pick up.

Bull market all set to continue

US 30 gained 25%, and the S&P 500 rose 19%. On a monthly basis, the indexes are also set for a historic end to the year. On a total return basis, which includes dividends, the S&P is on pace for notching gains in every month of the calendar year for the first time in history. The largest pullback was 2.8 percent, that’s the smallest since 1995.

S&P 500 has returned 20% or more 26 times since 1943, and followed that up with another positive year 20 times. The average return following a 20% gain has been 12%. The bull market looks all set to continue in 2018.

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Dylan Harris
Dylan loves money, business and success. And the ladies love him.

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