Money Flows before the start of the European Session

Today, we expect a negative sentiment stemming from the new IMF analysis after Christine Lagarde in Davos, in which the Fund cut its forecast for growth in the global economy. Yesterday, the United States rested on Martin Luther King Day, but today they are returning, and in Asia the session was colored in red after the investors took the warnings of the International Monetary Fund seriously. Considering the high levels of public and private debt, complicating trade conflicts will only lead to further deterioration of the risk sentiment with irreversible consequences on growth.

One of the catalysts could also be Brexit's no-deal for the UK and the even deeper slowdown in China's economy. Recent GDP figures have shown the worst performance of the Asian economy since 1990.

Indicative levels of opening of major European indices:

DAX: -53 points

FTSE: -27 points

CAC: -22 points

Given today's risk-off expectations, we assume that the US dollar will be boosted as being a safe heaven against the yen and gold. We expect the negative sentiment to hold through the US Session. Brexit will be overwhelmingly on Europe, of course, as the pound will be in focus. In his last move, Mae gave up negotiations with the other parties in an attempt to resolve the Irish border problem. The more the spiral of political chaos revolves, the more we come to two of the main options: no - Brexit or the second referendum.

Photo: Pixabay

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