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Markets kick off 2021 with a bang

Fawad Razaqzada Fawad Razaqzada 04/01/2021
Markets kick off 2021 with a bang Markets kick off 2021 with a bang
Markets kick off 2021 with a bang Fawad Razaqzada
Happy New Year!

After contemplating on what might be next for the markets during the holiday period, stock market investors are apparently in the same bullish mood as they were before despite growing concerns over valuations and the economy. The disconnect between economic reality and the markets have thus broadened, all thanks to cheap central bank and government money flooding the financial markets.

In 2020, risk assets rallied sharply following the initial lockdowns in March, as governments and central banks unleased record stimulus packages and other measures to support the recovery. Investors shrugged off further rounds of the virus resurgence and lockdowns and looked forward to more normal times ahead amid widespread vaccine distribution.

At the start of this year, it looks like investors are once again ignoring the rapid upsurge in COVID cases, especially given the lack of any other bearish news flow. So, stock prices continue to be bid.

Along with stocks, gold and silver have also started the new year with a bang as the dollar has extended its falls. The ongoing risk-rally means investors are continuing to swap their dollars for more risk sensitive currencies such as commodity dollars and emerging market currencies. As a result, the dollar index has fallen to levels not seen early 2018. This in turn, has helped to push prices of buck-denominated precious metals even higher.

In FX, the focus will be on the pound as the UK starts life outside of the EU. The pound has started the first day of the year in a cautious mood, rising only slightly against the dollar and falling against the euro. The latest lockdowns have dampened investor enthusiasm towards the pound, especially as PM Boris Johnson has warned of “tougher” new measures to control COVID surge across the UK. But I reckon the currency is still likely to rise further over time, as investors continue to price out the risks of a no-deal Brexit. As a minimum, I think 1.4000 is where the GBP/USD could easily rise to before we see any real troubles.

GBP/USD
Source: ThinkMarkets and TradingView.com
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

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Mohammed Zidan
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Mohamed Zidan
Chief Market Strategist, Dubai

Mohamed Zidan is a chief market strategist in Dubai and CFA Level III candidate. He reports to London office and has more than eight years of experience focusing on Forex, Commodities, Indices and global economic developments as well as central bank policies and intermarket analysis. worked as FX Analyst, and Strategist in several different organizations and for various departments. He holds a bachelor’s degree from Cairo University in Egypt. Mohamed Zidan is a regular guest on several major TV networks such as; CNBC Arabia, Fran24 Arabic, Alarabiya , Dubai TV, Sama Dubai, Skynews Arabia, Saudi National News, and Egypt National news.

Zidan presents insight to the markets movements, holds open discussions and relays possibilities related to the world’s financial market and economies.

Mohamed Zidan has been invited as a guest speaker for several international seminars. Zidan provides daily and weekly outlook for the markets. His experience ranges from currencies, commodities, stocks and options. he applies a top-down, global macro approach combined with price action to generate trade ideas and anticipate the next move.

Victor Golovtchenko
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Victor Golovtchenko
Global Macro Analyst, Sofia

Victor Golovtchenko has been analysing and trading foreign exchange markets since 2004, and is actively involved in the online media space since 2014. His tenure as a Senior Editor at a major brokerage industry news outlet was followed with a breakthrough into the financial news space with the brand new TradeStar website.

As an affectionate macro-focused analyst, he has an integrated framework to look at financial markets as a whole, identifying gaps between currencies, stocks, bonds, and other asset classes to get a core complete picture of the macroeconomic environment.

Fawad Razaqzada
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Fawad Razaqzada
Market Analyst, London

Fawad is an experienced analyst and economist having been involved in the financial markets since 2010, producing market commentary and research for a number of global FX, CFD and Spread Betting brokerage firms. He leverages years of market knowledge to provide retail and professional traders worldwide with succinct fundamental & technical analysis. Fawad also offers trading education to help shorten the learning curves of developing traders.
 
His colleagues consider him an expert at reading price action on the charts. This together with his deep understanding of economics and fundamental analysis, and trading experience, puts him in a great position to forecast short term price movements. Fawad covers a wide range of markets, including FX, commodities, stock indices and cryptocurrencies and his comments are regularly quoted by the leading financial publications such as Reuters and Market Watch. In addition to ThinkMarkets, Fawad also provides analysis and premium trade signals on his own website at TradingCandles.com.
 
 

Carl Capolingua
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Carl Capolingua
Market Analyst, Melbourne

Carl has over 20 years' experience in financial markets and has held senior analyst roles at a number of financial institutions. Specialising in Australian and US stock markets in particular, Carl uses a top-down approach to assess the global macro picture before using both technical and fundamental techniques to select stocks. He regularly appears as an expert commentator on a number of media outlets throughout the Asia-Pacific region.
 
 
 

Mohammed Zidan
Mohamed Zidan
He has more than eight years of experience focusing on Forex, Commodities, Indices and global economic developments as well as central bank policies and intermarket analysis.
Victor Golovtchenko
Victor Golovtchenko
Victor Golovtchenko has been trading on the foreign exchange markets since 2004, and is actively involved in the online media space since 2014. His tenure as a Senior Editor follows his role with TradeStar.
Fawad Razaqzada
Fawad Razaqzada
Fawad is an experienced analyst and economist having been involved in the financial markets since 2010, producing market commentary and research for a number of global FX, CFD and Spread Betting brokerage firms.
Carl Capolingua
Carl Capolingua
Carl has over 20 years' experience in financial markets and has held senior analyst roles at a number of financial institutions.

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