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Trading financial products on margin carries a high degree of risk and is not suitable for all investors. Please ensure you fully understand the risks and take appropriate care to manage your risk.

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Market Insights

Trading insight: Global stock markets advance

Copy of Blog Images - Skilling - 2023-05-18T100401.024

Screenshot 2023-05-18 095947
The above chart illustrates the Japan 225 Index price performance during the last 48 hours as of May 18 2023.

Market Talk

Political nonsense or is there a real chance a US debt ceiling deal could be announced as soon as Sunday?
Price action across risk assets suggest that investors have been positioning themselves for a “positive” outcome. “Positive “ in the sense that any deal could have “strings” attached, and the fine details of any deal could have major implications for the financial markets even with a deal. One such string could be to allow congress to spend as they like, but only be able to grow spending by say 1% -2% per year. If such a deal emerges it could in fact signal to financial markets that further debt ceiling crises will re-emerge again from time to time.

Bottom line: Could be a nice deal for traders who live off market volatility

Key points:

  • Australia unemployment rate moved higher: AUD/JPY drops 0.25%, despite slightly positive technical signs, upside prospects remain for the AUD/JPY
  • US Natural Gas inventories due: global demand remains weak, high storage levels because of a relatively warm winter could be a concern for buyers, US Natural Gas current price testing the resistance near $2.50, upside prospects above $2.5 could put $2.83 in sight, downside risk seen below $2.21.
  • Mexico interest rate decision: No change is expected from Banxico, slowing headline inflation supporting the no change rate forecast. USD/MXN current price 17.6028, downside pressures remain for the USD/MXN with 17.40s possible next leg lower, upside risk seen above the 17.70s.

Today’s economic calendar

Screenshot 2023-05-18 100016 Source: TradingView / J. Knobel May 18 2023 5:33 UTC

Trading bullets

Bullish on Brazil?

Brazil 50 Index (IBRX50) is classified as an emerging market index and part of the BRIC’s (Brazil, Russia, India and China)

Emerging market indices tend to attract more interest from investors as global risk appetite (sentiment) improves.

If price is a leading indicator, what is price indicating for the Brazil 50 Index since the March lows? Higher tops, and higher bottoms on price during the last few months could be a signal that global investors are bullish again.

Screenshot 2023-05-18 100047
The above chart illustrates the Brazil 50 Index (daily chart) as of May 18 2023 6:26 UTC

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Not investment advice. Past performance does not guarantee or predict future performance.