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Monthly Archives

June 2018

Time for Alarm Bells?

By | USA, Euro, FX Trading, Opinion | No Comments

Do the Financial Markets need a “Black Swan” event to ring a bell to indicate a crises is looming, or will they just let the below events just play out and create a slow burn, which will eventually create turmoil “run for the exits” style panic sell off.

“A complacent Global Financial Markets to the significant events in the U.S, Europe and beyond which could trigger the next global financial crisis.

Financial Markets, including key regulatory authorities do not understand risk, and they do not price it correctly.

There is a danger of drifting into a global trade war, given US President Donald Trump has finally imposed long promised tariffs on steel and aluminium imports from the EU, Canada and Mexico. If not handled with care by all sides, this could lead to global slump such as that created by protectionist legislation in the US in 1930.

The Eurozone also faces a potentially existential crisis as the result of the new anti-austerity, anti-EU, heavily indebted government in Italy. As the Eurozone’s third largest economy (ranking 7th or 8th globally, and six times the size of Greece) the risk is of a debt crisis that would dwarf the Greek debt crisis in severity and threaten the future of the Eurozone (and perhaps of the EU).

As if all this uncertainty isn’t enough, there is renewed concern about oil prices, global (especially Chinese) debt, the transition – being led by the US Federal Reserve – to “normalise” interest rates, and key elections in emerging markets (Turkey, Brazil and Colombia), with other key emerging nations in dire, debt/inflation-ridden economic circumstances.”

Let’s see how this plays out.