“Oversold stock markets have found some relief in the short-term, but prevailing risk off sentiment should gain the upper hand soon once the next development in the Russia-Ukraine crisis arrives.”
Indices recoup losses but bounce unlikely to last
“After the losses of Friday and Monday a bounce of some sort was to have been expected. Given how keyed up investors had been regarding the developments in eastern Europe, the lack of any full-on conflict in eastern Ukraine has provided the chance for markets to edge higher. Some short positions will have been closed out and some dip buyers might even be thinking about chancing their arm in the market after the recent losses. But such swift bounces are a feature of declining markets, and with further developments in the crisis inevitable, the likelihood is that a headline will come along sooner or later and prompt another leg lower.”
Gold and oil drop back for now
“Just as the rally in stocks is probably temporary, so today’s weakness in oil and gold is likely to be short-lived. Given how energy will be a key weapon in the sanctions battle now developing, it is probable that oil prices will recoup recent highs in short order. Meanwhile gold will be the classic safe haven, and another push towards $2000 looms. Given how quickly the crisis is developing, by the time the next FOMC meeting rolls around some of the committee are likely to be much more circumspect in calling for a swift tightening of policy, weakening the dollar and giving room for gold to keep rallying over the medium term.”
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Recommended Content
Editors’ Picks
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.