European markets are trading higher this morning, however volume to remain low as US markets are closed for a public holiday today. The geopolitical tensions are on the forefront and have heated up further amid traders who are focused to see what will be the new sanctions announced by EU and the US. Given that both sides are not budging at all and by that I mean Russia and the West, I do not see a happy ending any time soon for this.
There is no doubt that we have experienced one of the best August for the US markets in nearly 14 years, but the question is, if this market is strong enough to stand on its when there will be no more quantitative easing from the Fed and the interest rate will start to increase. Moreover, what about the spill over effect from the weaker growth in EU and how that is going to impact the US markets. The ECB growth is deeply dependent on the actions of the ECB. We do know that the meeting is due this week and what we are looking is, if the ECB is going to continue to play this waiting game, and want to see the impact of their TLTROS which are going to kick off on September 18 and then make their further decision.
The recent CPI data has certainly given the ECB more leverage to negotiate and hold off from full blown quantitative easing program but a surprise is always on the cards when the ECB will deliver their press conference this week.
Disclaimer: The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.