World Markets Next Week: Full of ECB Hopes

Jan 18, 2015

Fellow traders, I hope you had had an excellent weekend by stuffing your stomachs, relaxing your  brain cells and enjoying your city’s thriving life in whatever corner of the world you live in.

Me? Oh I have been busy on a “date”; with the account books of my small business  and calculators 🙂

If you have had enough of the outside world, get ready for a very volatile, action packed session in global markets next week, starting in a few hours from now.

Here are the main points in short :

Election in Greece, the ECB’s monthly meeting and fall out of the Swiss National Bank’s forex policy will create havoc in global markets.

The ECB will declare its short term monetary policy next Thursday ( 22nd Jan). Markets are hopeful of a big sized QE from Mario Draghi, the ECB President, which he has been promising for a long time now .

That’s why European markets have been rallying, ignoring a 1,300 point drop in Swiss markets in just two last session.

U.S. markets survived the support levels and closed in the green on Friday last, indicating that we might see another positive session on Monday in these markets- or, we may not.

As I have written last week, U.S. markets are not sharing the enthusiasm of other global markets and have shown obvious weakness.

But European and Indian markets are having “central bank rallies” and this has more chances of continuing next week.

The rally in European markets is fueled by QE hopes from the ECB. But, an QE that is not big as the markets anticipate might give another jolt to this speculative  rally.

So be very, very careful with your trades. Greece is going to polls in a few days and anti-bailout party Syriza is gaining in opinion polls. Last time that happened, markets had started going down.

Markets- or market speculators, have no clue what central bank plan to do. The Swiss shocker proved it. So, protect your money, and don’t follow rallies blindly. Markets are jittery and there have been many sudden drops within these rallies last week.  Next week might see a range bound pattern in the early part of the week. Final trend will emerge only after the ECB’s move.

Soon, Asian markets will be ringing their opening bells and European stock futures will take a lead in deciding global trend since U.S. markets will remain closed on Monday.

In short, the fun and entertainment will be starting soon 🙂

See you then in the trading rings!

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