Investors Displeased by Central Banks

Investors Displeased by Central Banks while May focus on Brexit

It was a very disappointing day for investors as nothing came good out of the ECB meeting and on the earnings front, there were no upbeat news either. Investors saw that the central banks are keeping the markets happy by only talking but no reaction and hence we had a negative close on Wall Street. Today, traders are building on the same momentum and it appears mood is mostly very pessimistic.

The UK's prime minister started her attempts to level the playground before the match starts and met two most powerful leaders in the eurozone; Angela Merkel and Francios Hollande. Germany and France are possibly going to create the most amount of turbulence in post Brexit negotiations and Theresa May wants to make sure that she is in their good book and establish a more friendly environment. Both Merkel and Hollande have agreed that the new prime minister needs more time to pull her tactics together to start the negotiations, but they have also sent a clear signal that there is no such thing called pre- negotiations. Both have urged the prime minister that she should trigger the article 50 so that negations can start and the process becomes smoother which will have more fruit for both sides. A messy divorce is something both sides ostensibly wants to avoid but given their agendas it certainly seems difficult how that can be achieved.

It is in the EU's interest that they push May to not to delay the triggering of article 50. The longer they leave this issue, the higher the chances are that other countries within the EU may start to look for a similar right.

The Japanese Yen is reversing its losses against the dollar fast as hopes of helicopter money are fading fast. However, investors are sceptical if BoJ can afford no further QE given that the global growth is so fragile and Japan has still the very same difficulties which it was facing. Nonetheless, the support is at 103.85 and the resistance is at 106.84.

ENDS

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