Markets nervous ahead of Inauguration Day

Published at Jan 20, 2017, in Features

While there weren’t any major falls in market indices or commodities overnight, most trended downwards and there was a sense of nervous scepticism ahead of Inauguration Day, reflecting a fear of the unknown rather than the clinical dissection of information that normally drives markets.

Even well received commentary from European Central Bank President, Mario Draghi which pointed to a continuation of quantitative easing in 2017 failed to spark confidence in that region.

The FTSE 100 was down 0.5% while the Dax finished relatively flat after early gains that occurred on the back of Draghi’s address. The Paris CAC 40 also finished in negative territory, shedding 0.2%.

In the US it was a slow but sustained slide on the Dow as it came off approximately 70 points or 0.4%. The NASDAQ also finished 0.3% lower.

While the oil price rallied strongly to hit an intraday high of US$51.87, it also pulled back to close at US$51.41, a gain of 0.6%, which is some respite after a difficult week.

Gold was relatively unmoved, indicating that investors are unsure whether safe haven investing is appropriate.

Elsewhere in commodity markets, there was little movement in the iron ore price and all base metal prices finished in negative territory with nickel the hardest hit.

It fell from the previous day’s close of approximately US$4.57 to US$4.45, representing a decline of 2.6%.

This could heighten already negative sentiment, as most stocks exposed to nickel have experienced sharp falls in the last week following Indonesia’s decision to recommence exporting nickel concentrate rather than processing it in its own smelters.

The Australian dollar was relatively unmoved against the US dollar and is fetching US$0.756.

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