Will the markets calm down now?
- by Anna K.
Yesterday we were witnesses to USD really recovering and claiming its crown as a king of the markets – all as the result of a very successful round of trade talks.
So, what happened? Well, trade talks have been on the mind of traders for a long time now. And I think that it is only fair that after so many tries we would never think that another round was going to bear results. But, unexpectedly for us, it did. Imagine our surprise when USA said that they were ready to lift some of the tariffs imposed on China and China in its turn asked for even more tariffs to be lifted and wasn’t met with the wave of loud voices.
That was a real surprise.
What were the reasons for such a decision? Well. There might be plenty of those. Maybe USA saw that as soon as the trade talks started, USD started to gain power and trust of traders even though the American currency was falling pretty hard before. Maybe they were afraid of the long-term effect that the trade war might have had on their own economy. Maybe Trump is trying to soften the blow and wants to seems all kind and rational. Or, maybe, Chinese are just that good and the parlay and offered Americans an offer those couldn’t refuse.
In any case, whatever the reasoning was behind such a decision, we couldn’t be more glad to hear about it. But there is still one question left – will the markets calm down now? Will this be enough to make our trading go to the normal?
Well, it might be, but only for the time-being. Trade talks are going to go in several stages and we are now only nearing the end of the phase one of the talks, Trump is never going to agree to lift all the tariffs until there is still a trade deficit with China. Plus, there is a question of whether Trump is going to be able to be there for the end of the talks at all, with all the impeachment possibility swirling above his head.
Calm market are our dream. And the further we go, it seems, that more unattainable it becomes. Plus, we have to remember that constant growth is impossible. Sooner or later bull market is going to change its pace and bears are going to come in its stead.
I think, that for us it is better to focus on the things which might disrupt our trading in the nearest future.
For example, the same old tired Brexit. Although we have still some time until the next term comes to an end and Johnson is likely to go and ask for the next postponing of the process, it is time that we started preparing for it.
As for the economy of the world, it is too hard to say what is going to happen without having to dig in too deep into the analysis. Right now, I would say, it seems that everything is based on three major things – Brexit, impeachment of Trump and the situation with Russia that can easily manipulate oil market as its national currency – Russian ruble [RUB] – is fully dependent on oil prices. These are the three key factors that need to stay calm in order for the markets to be calm as well and for our trading to have some kind of stability.
Right now the eyes are still on trade talks and their progress. And how we hope for them to be successfully over soon.