Originally posted by R.Cox. Check the full trading briefing
Global stock markets traded mostly sideways this week, as some conflicting factors stalled any possibilities for declines or rallies, and kept prices contained in smaller ranges. Early in the week, markets saw volatility pick up as there were misleading polling numbers relative to the election results in Italy, with the investor-friendly candidate first showing a victory but later losing. Longer term, this is a Euro bearish event, as there is a greater chance we will see political obstacles when bailout funding is required and Italy is less than willing to complete required austerity measures.
Looking ahead, next week is significant in terms of economic releases and central bank meetings, and this will guide prices near term. Employment data will come from Canada and the US on Friday, with Non Farm Payrolls expected to show an increase of 155,000 jobs. This would be roughly in line with what was seen last month. In addition to this, we will have central bank meetings in Australia, Canada and the Eurozone. We will also have GDP figures from Australia and the Eurozone.
The EUR/CHF showed strength last week, even in the face of broad Euro weakness, and this bodes well for the longer prospects for the pair. If the EUR can make any headway against the USD, the EUR/CHF would be a major beneficiary. Look for weekly CALL options in the EUR/CHF at 1.2240.
2. Monthly stock pick is for CALL options in General Electric (GE) at 23.
Recent strength in earnings is being supported by the 3.4% dividend yield and multiple stock upgrades. On the charts, we are seeing prices at key Fib support levels, which should contain prices going forward in March.