It’s August! Which can be a time of year where some traders get nervous. Why is that you ask? Historically speaking, August’s seasonality doesn’t play nice with a couple of securities like certain equity indexes and the high beta currencies. So, the big question then is will market history repeat itself?
This Week’s Economic Calendar
Market attention in the week ahead will turn to US politics as discussions about the next stimulus bill continues. To make things a little more interesting we also have the possibility of additional US/China tensions, another FOMC meeting and Q2 GDP for the US and EU.
Probably not. The past week gave us another round of choppy price action for most risk assets with the start performer being the Euro. This upcoming week will be quiet in economic data terms, but we’ll have plenty of other macro themes to keep us busy as virus headlines should remain a focus, alongside stimulus comments.
We had another strong rally in US equities into the close on Friday, which does point to some more appetite for holding risk assets over the weekend. There is lots of headline risks this week which could provide some excellent short-term trading opportunities regardless of whether you are siding with the optimists or the pessimists.