Price action alone from yesterday's London and NY session will show you the battle ahead for investors, as they decide if markets should plummet further or rebound as if it never happened.
- Europe and US absorbed the news that PBoC had slashed interest rates and flooded the banking system with new liquidity.
- FX markets saw a volatile session but not a scratch on yesterday's turblunce, with some crosses 'only' moving up to 3% on the day before returning to their opening prices.
- Chinese shares had continued to tumble with the main index down -7.6%
- US Indices had a volatile session resulting in price swings between 3%-4%, finally closing the session back at the open price. Dow Jones has (so far) managed to stay above the bullish trendline from the 2009 GFC low, and is a level all participants will be closely watching. If there is a glimmer of hope it is from the options market which points to an overly-pessimistic crowd sentiment, leaving Indices vulnerable to a bounce higher at some point.
- European Indices took a more positive lead from the Chinese action, with CAC, DAX and FTSE all ending the session higher. German IFo business climate also edged higher to 108.3 from 107.6, a 3-month high.
- Gold failed to break the bearish Jan '15 trendline, selling off to $1134 to suggest a potential swing high. However if we see an upside break then we can use this as a bullish continuation signal