It is a quiet start to the new trading week, with markets looking quieter than usual. But I feel that things are going to change quickly, because after just a few days we have the ECB’s decision on the EU base rate (Thursday), with market participants expecting a 20 basis point drop in rates.
In addition, I expect the risk of sentimentality to remain the determining factor driving stock and FX market quotes, at least until the proposed US-China trade meeting in October.
After a very strong week, no correction has been ruled out for the US stock indexes, and in days like today (without major economic news), traders will trade mostly common rhetoric – trade war, shrinking global economy and rumors of recession. With so many negatives, the positives remain limited in number, so it is entirely possible for us to see market downturns, at least until a predetermining catalyst emerges to re-instate confidence in traders.

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