I hope you are excited about starting a new week of productive trading for Monday, September 13, 2021 to Friday, September 17, 2021.
Although this week’s economic docket is void of central bank monetary policy meetings, there will still be a slew of global inflation readings and retail sales data that will introduce some volatility and provide analysts with clarity on the progress of economic recovery across the globe.
As US markets closed lower last week, will we see a prolonging of the sell-off in risk oriented assets as inflation fears gain traction?
At today’s FX open, the greenback (USD) showed signs of softening along with other safe haven currencies, and high-yielding currencies are catching a bid. According to the chart above, the US 10-YR Treasury yield is still holding on to its advance from last week and have stabilized around 1.341%. At the moment, this lack of “follow-through” in rates is serving to calm investor fears about inflation pressures and is spawning an attitude of risk appetite across asset classes.
However, since this is the Asian Trading Session, with lower volumes, we can not assume this sentiment will be maintained throughout the trading session. As more trading bourses open around the world, we may gain further insight on how risk assets will be traded for the first day of this new week. Hopefully, the bid we’re witnessing in global equity future indices is not another round of “Monday Retracement, Tuesday Turnaround”. My hope is that we will see a resumption of the stock market rally across global indices as policymakers downplay inflation concerns and we witness encouraging economic data through the week.
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Marvin Perry has been an active trader within the Forex market since 2010. He attended the University of Illinois in Urbana/Champaign, and graduated in 2002 with a double major in Cell and Structural Biology and Chemistry. He currently serves as an FX instructor & Quantitative Analyst for the Forex Anatomy Private Trading Community called "The Lab", where he conducts live weekly trading webinars & instruction on Fundamental Analysis & Inter-Market Interpretations of dynamic asset classes and their influence on currencies.