Markets brace for more trade developments
Financial markets are poised to remain heavily influenced by ongoing trade developments in the week ahead.
We expect the market mood to gradually improve after US-China trade talks concluded on a positive note. While easing tensions between the world’s two largest economies will be a welcome development for equity markets, global risk sentiment still remains fragile. With geopolitical risks such as Brexit and political uncertainty in Washington lingering in the background, investors should brace for a volatile trading week.
In the currency markets, the Dollar lost its crown due to a cautious Fed and is seen extending losses on speculation over the central bank taking a pause on rates this year. The fate of the British Pound hangs on the outcome of the meaningful vote on January 15 while the Euro is likely to gain on Dollar weakness. While Oil prices could benefit further from the risk-on sentiment, upside gains are poised to be capped by the supply and demand dynamics.
Looking at global markets,
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