What to expect in the next few weeks and month ahead as the global market embrace the year of the Red Monkey:
- The true risk lies in Chinese global economic outlook and question remain if China is facing a soft or hard landing?
- Yuan devaluation may be the only policy to maintain growth – however, we cannot rule out a global currency war
- Money outflow suggest concerns about domestic growth in China is growing
- There is also a potential of delayed purchase among producers as market sentiment has grown from cautious to over-cautious – curtailing spending
- 2016 kicks off with increase market volatility but the more important question is when will the market head into a stable environment?
- Central banks around the world will need to adjust their tone and policies to suit market expectations
- BOJ has initiated negative interest rate, will the ECB and the FED follow suit in 2016?
- Traders big worry is for a severe market correction – central banks may not have the necessary tools to avert it
- Panic mode continue to hover in the market place – Safe Haven demand remain elevated
Daily – Potential sign of reversal as Dollar index may have found support with RSI building a steady divergence