Markets Updates – What’s Hot this Week
This week will probably be the most interesting weeks in the financial market this year. This is because of the vast amount of data and market updates that is anticipated to be released coupled with the amount of news that will come out during the week. As shown in the chart below, the volatile index (VIX) which measures the amount of fear in the market has been rising in the past few days. In this article, I will highlight a few reasons why this week could be the best for traders this year. Remember that for traders, the higher the volatility, the higher the amount of profits that a trader can make.
YTD VIX Price
#1 – The United States Election
This week is the final one in the US election. The election will take place on November 8th. The election has been an interesting one. This is because of the vast level of unpopularity among the presidential candidates. Hillary Clinton and Donald Trump are the most unpopular candidates in the United States history. As a result, most voters will be voting for a candidate to prevent the ascent of the other candidate to the most powerful office in the world. While polls predict a Hillary Clinton victory, the market is not sure who will carry the day. On Friday last week, the Federal Bureau of Investigation (FBI) released a letter indicating that they would reopen Hillary’s case. The market, which was trending up during the day reacted by falling as shown in the chart below. This week, all eyes will be on the US election and any news that may arise. As a trader, you should have your news sources close to you because you don’t know what new thing could come out.
5 Day – Dow Jones Industrial Average
#2 – Monetary Policy Announcements
As I have explained in my previous articles, monetary policy announcements are the leading causes of major market movements. When a monetary policy committee hikes interest rates, chances are usually high that the economy is improving. This leads to a bullish case for the underlying currency. This week, there will be four monetary policy announcements. These announcements will come from Australia, Japan, United States, and the United Kingdom. In the economic calendar, no major announcement is expected. However, you should always look forward to surprises in the market. For instance, last week, the GDP of the US grew at a faster rate than expected. Therefore, the fed could surprise the market by hiking the interest rates. If this happens, chances are that major movements will be experienced.
#3 – Key Releases
This week also the economic calendar is a bit busy with a number of other economic releases expected. There are four employment reports from the US, Canada, Germany and New Zealand. A reduction in the unemployment rate is positive to the market while an increase is negative. Also, an increase or improvement in payrolls is a positive factor to the market. Therefore, as a trader, you should look at the calendar carefully and trade accordingly. If you are an expert in trading the news, this week will be your week. If on the other hand this is not your thing, you should avoid the market at all costs during the market releases.
#4 – Crude Oil
Four-hour Chart of WTI
This week, crude oil will play an important role in the market. Two weeks ago, at an informal meeting in Algeria, the OPEC member states announced a plan to reduce their output. This led to a hike in oil prices. Last week, Iraq released a statement saying that they would not reduce their output. This led to a fall in crude oil prices. This week, the OPEC member countries are meeting to negotiate the oil freeze. However, the market believes that the oil freeze will not happen. Therefore, you should look carefully at the OPEC meeting.