Traders withdraw from markets ahead of Doha

Money flows into safer markets such as gold ahead of the Doha meeting says Joshua Mahony, market analyst at IG

Traders withdraw from markets ahead of Doha

A tangible sense of apprehension has swept across global markets today, with traders unwilling to hold positions into the weekend given the clear risk of [the OPEC/non-OPEC meeting] in Doha on Sunday.

Once more money is beginning to flock into safe haven assets such as gold and the yen, at the expense of the week’s best performers. Given the FTSE 100’s exposure to crude prices, it comes as no surprise that traders will reduce their exposure given the unpredictability of Sunday’s meeting.

Chinese data failed to inspire Asian markets to extend gains for the week, with all major Chinese, Hong Kong and Japanese indices drifting lower to close out in the red. Following on from impressive Chinese export data on Wednesday, the release of notable improvements to FDI, industrial production and retail sales goes a long way to showing the economy is back on the front foot.

While a weakening services sector proved a drag on Chinese GDP, a 13-month high for industrial production growth proves that manufacturing is on the mend as highlighted by rising exports.

Citigroup provide the third and final US bank to release earnings this week. JP Morgan and BoA have shown that the recent pessimism, evident in the lead up to this earnings season, could be unjustified, with both seeing their share price rally heavily upon releasing Q1 figures. However, it is worth realising that low expectations are the driver of this bounce, with conditions proving tough for US banks amid squeezed profit margins, slowed investment banking activity due to volatile markets, and energy loans writedowns.

Ahead of the open we expect the Dow Jones to start 24 points lower, at 17,902.

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