Futures in the United States and Europe are trading flat, with investors hopeful that the worst of the European and American financial crises have passed. Nonetheless, we think that traders should exercise prudence and keep a close watch on the CDS for banks in Europe and the United States. For the time being, the volatility index has taken another fall, but if we stop putting our finger on the pulse, things might quickly worsen. This is due to the importance of the Fed’s and ECB’s monetary policies. So far, no big shifts have occurred, and the gap between what policyholders perceive and what market participants predict is extremely wide. This implies that one of these two elements will have a reality check, causing a shock to the stock markets—of course, that shock may be a favourable one, particularly if policyholders abandon price stability.
Stock Market Today
For the time being, the UK’s FTSE 100 index is projected to open 22 points higher, the German DAX index is likely to start approximately 49 points higher, and France’s CAC 40 index is expected to open 28 points higher.
Overnight on Wall Street, the US equity indexes had a solid day, which is boosting US futures today. The Dow Jones Industrial Average gained 0.6%, the S&P 500 gained 0.2%, and the Nasdaq concluded the day in negative territory, down by 0.5%.
Cryptos and Binance
The SEC has filed a lawsuit against the CEO of the largest cryptocurrency exchange, Binance. For many, this event had been a long time coming, since Binance had mostly closed its doors to American investors. But, we are positive about the SEC’s move since it will only push more participants to follow the rules, which should enhance trust among institutional traders. It’s critical to remember that Binance is not Bitcoin, and that the SEC’s case against Binance does not herald the end of the crypto sector, especially Bitcoin. Authorities are now doing what they should have done a long time ago: promoting only those players who follow the rules and protecting consumers, who are often left holding the bag.
While the Fed is taken off surprise, the recent decrease in Bitcoin prices presents an opportunity for traders. The Fed’s hardline monetary policy will almost certainly have to be eased, which will only increase demand for Bitcoin. Moreover, the US financial sector has experienced a significant setback, leading many to believe that bitcoin is the solution to many of the problems that banking institutions face.
Gold Price Moving Higher
The precious metal is still trading downward; but, we have seen some green today, indicating that some buyers are returning to the market. The recent sell-off has brought buyers back into the market, although gold dealers are aware that the big event that will move the needle will be the US NFP data, which is expected next month. Having said that, traders are closely monitoring all US economic data, and today’s US Consumer Confidence statistic, which will be announced at 15:00 BST, is expected to increase volatility for the metal. Consumer confidence is projected to fall, forcing the Fed to halt hiking interest rates.