Apr 6th 2016: Cautious Optimism

• Markets remain cautiously optimistic after another drop in US markets overnight. Equities have recovered well off the February lows, but no-one is expecting a straight line recovery from here, especially with the ECB in ‘whatever it takes’ mode and Greece rumbling in the background. The US dollar has staged a slow recovery this week, but this evening’s FOMC meeting minutes could prove a stumbling point.

• Elsewhere, the Japanese yen is pausing at the lows after a period of scrutiny from world markets.

• In Europe, the euro continues to hold the balance of power, with the pound slipping back again yesterday and the GBP/JPY continuing to slide.

Coming up today: 

• Coming up today we have Canadian Ivey PMI at 15.00.
• This is followed by US crude oil inventories at 15.30.
• FOMC member Mester speaks at 17.20, with FOMC minutes released at 19.00 and Bullard speaking at 23.30.

Trade Idea: 

• With the US dollar showing some stability and the yen remaining under pressure, the USD/JPY could have further to fall.

• A good way to play this is a LOWER trade predicting that that the USD/JPY will close below 110.00 in 14 days time for a potential return of 132%.

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