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Weekly Market Outlook – 3/07/16

Weekly Market Outlook – 3/07/16

The FX markets may be the focal point for the investment world this coming week. Bonds continue to fall into record low yields globally and this has also created an environment that is like roulette with equities and Indices as investors look for profits in a very challenging environment.

What traders need to know is that even with the seemingly tranquil summer in effect that volatility is likely to be seen as important questions create concerns in global markets. Can the GBP The GBP The GBP is the official currency of the United Kingdom. The GBP is a major currency and currently ra... More is the official currency of the United Kingdom. The GBP is a major currency and currently ra... More hold onto its ground and mount a climb of value or will it see its outlook weakened if critics of the Brexit chip away at the outcome in which the British public has voted?

The EUR The EUR The EUR is the official currency of the European Union. Presently 19 out of the 28 collective  nati... More is the official currency of the European Union. Presently 19 out of the 28 collective  nati... More also faces critical knock on questions because of integration challenges with the U.K. and concerns about member nations in the E.U. possibly seeking changes to structural agreements. From Asia concerns about the economies of China and Japan continue to hover and cast a large shadow on the JPY The official currency of Japan is the JPY The official currency of Japan is the JPY which is also knows as the Japanese Yen The official currency of Japan is the JPY which is also knows as the Japanese Yen The official currency of Japan is the JPY which is also knows as the Japanese Yen to investors and t... More to investors and t... More to investors and t... More which is also knows as the Japanese Yen to investors and t... More . The government of Japan would love for the JPY to be weaker in order to make Japanese products cheaper internationally, but safe haven traders have shown a tendency to buy the JPY in times of heightened concerns.

Via the U.S. economic activity continues to be under the microscope and the Federal Reserve The Federal Reserve The Federal Reserve The Federal Reserve is the Central Bank of the United States of America and sets the monetary policy When used by traders and investors monetary policy When used by traders and investors monetary policy When used by traders and investors monetary policy usually refers to Central Bank policy concerning ... More usually refers to Central Bank policy concerning ... More usually refers to Central Bank policy concerning ... More ... More is the Central Bank of the United States of America and sets the monetary policy... More is the Central Bank of the United States of America and sets the monetary policy... More faces hurdles. The Fed The Federal Reserve is the Central Bank of the United States of America and sets the monetary policy... More has proven to be very cautious the past year and the outcome of the Brexit vote did not make their task any easier.

After opening in the midst of a violent storm traders actually started to find calm winds and opportunities last week. With news of the Brexit still causing havoc early, the GBP found itself under plenty of pressure, but by Tuesday the GBP became more stable and started to trade within a range. However, upon a closer look Sterling The GBP is the official currency of the United Kingdom. The GBP is a major currency and currently ra... More did not gain back anything but a small percentage of the massive amount of value it had lost. While the FTSE did finish with gains, plenty of questions remain regarding the logistics of a Brexit and the challenges the U.K. will face politically as it moves forward.

The U.S. will be celebrating its Independence Day holiday on Monday and because of that global trading volumes will drop, which could open the door for day traders who are looking for short-term reversals via technical The use of the term technical The use of the term technical The use of the term technical in trading usually refers to a variety of methods in which a trader or... More in trading usually refers to a variety of methods in which a trader or... More in trading usually refers to a variety of methods in which a trader or... More charts. Commodities turned in gains among the metals led by Gold last week as safe haven trading continued to show a strong determination. Silver also put in gains.

However, Crude Oil continues to show that it is having a tough time punching through resistance When investors and traders use the term resistance When investors and traders use the term resistance When investors and traders use the term resistance, or resistance level, they are often speaking abo... More , or resistance level, they are often speaking abo... More , or resistance level, they are often speaking abo... More levels, Brent Crude and WTI Refers to West Texas Intermediate Refers to West Texas Intermediate Refers to West Texas Intermediate which is often the actual physical resource that the asset Crude O... More which is often the actual physical resource that the asset Crude O... More which is often the actual physical resource that the asset Crude O... More remain tangled up with over-supply and weak demand. This highlights that while Wall Street and many other Indices put in strong gains last week that there are still questions about the global economy from all the major spheres. Is it possible the gains on the major Indices happened because short-term investors were seeking value and will look to dump stocks when enough profits have been realized?

Summer trading is certainly upon us. Investors typically start looking at their calendars about now and plan for relaxing days and quiet markets. This summer could be vastly different. A cocktail of Brexit questions, a lagging American economy, global Central Bank concerns, fears about the Chinese economy and the U.S. election could form a combustible climate. Meaning investors will be left to trade markets that remain littered with uncertainties.

The U.K. will issue Construction PMI on Monday. Tuesday will see the Caixin Services PMI from China and Services PMI from the U.K. The U.S. will return from its holiday and publish Factory Orders on Tuesday. German Factory Orders will be issued on Wednesday and the U.S. will see the ISM Non-Manufacturing PMI and Fed The Federal Reserve is the Central Bank of the United States of America and sets the monetary policy... More Minutes. On Thursday the jobs parade data starts with the ADP numbers and the weekly Unemployment Claims. The music will get loud on Friday when the Non-Farm Employment Change statistics are distributed.

Traders need to be aware that politics will continue to have an effect on market sentiment this week as various officials continue to speak about the Brexit exit and its impact. It is clear that some politicians and officials will continue to prick the topic and offer a wide array of contradictory opinions and insights which could affect market sentiment.

BoE Governor Mark Carney seems rather intent on injecting his views into the subject. Last week Carney hinted that the Bank of England will have to consider an interest rate cut. What is interesting about that remark is that it continues to show that the major Central Banks feel that ‘free money’ is the ointment that will solve all ills. However, there is a growing mass of critics who believe that Central Banks are making mistakes and fear that interest rates are far too low. Traders should be prepared for markets that could have swift moves from FX, commodities, equities and Indices as the tranquillity of summer is put to the test.