Market impulse 25.07.2016

25.07.2016 / 12:24

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What moves the market sentiment today and what can be traded

The positive expectations from the IFO indices data in Germany kept the risk appetite this morning despite the terrorist attacks in Germany this weekend.

Expectations were for a better data and that became a fact at 11:00 resulting in an upward movement in indices with 70 points, which may have played the entire day movement. From here on the focus moves to the financial statements form US companies. Lower expectations lead to bullish signals at every major statement. Therefore we can expect support from there.

On the other hand this week there are a lot of news: FED on Wednesday - expectations are interest rates to remain unchanged. Also on Wednesday GDP in UK, expectations are for a rise with 0.5%. On Thursday waiting to see after BoJ meeting if there will be new stimulus and on Friday GDP in the EU. We must not forget the stress coming from the Italian banks .

Therefore there are opportunities for surprises. Considering stock's high levels there is a chance the surprises to be negative. That is why indices levels are suitable for short. Caution may come fore and see profit taking in anticipation of a highly dynamic and rich in news week.

Good positions of buy on EUR versus JPY and other pairs.

We will monitor the UKX and see if the breakthrough above 6743 is false.

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Market impulse 25.07.2016

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