A quick summary of some of the main drivers in markets at the moment
We always want a reason why something is moving yet there's usually more than one answer.
1. Losing the faith
Markets are throwing their toys out of the pram because central banks aren't playing ball. Dollar bulls want hikes, yen bears want easing. The Fed is non-committal on the next hike (why shouldn't it be?). The BOJ is full of hot air and the focus is swinging back to whether Abenomics is a failure. The central bank calls for governments to do more than rely on central banks to fix things is growing louder.
2. As sure as eggs is eggs
Commodities are all over the place. Oil has been rising even though there's record production and record supplies. Specs are shouldering the blame. Bloomberg reports that speculative commodity trading in China is dwarfing stock trading. Egg have been one of the bright investment stories with futures up 27% this year. Steel rebar is up 38% this year and +29% last month alone. The Shanghai Comp is down 15% so far this year. All this while Chinese (and other majors) Manufacturing is in (or hovering close to (whichever numbers you believe)) contraction. The supply/demand sums still don't add up.
The pull in FX from commodities is large. Just look at oil related currencies like the CAD and GBP.
3. My old China plate
Never far from the headlines is our old mate China, growth problems, debt problems. It's like a long running medical condition that doctors don't know if it will be cured or end up killing the patient. If markets have nothing else current to blame they turn to China
4. A barren land
Where do we get growth from? Central banks have been flat out trying to create the conditions for growth while governments have been doing nothing to sow the seeds of growth. It sort of ties in with 1 above. The long-term picture isn't bright and that's not a condition markets like. It's these sorts of moods that drive the big long lasting flows, which can swamp the short term spec stuff. Investors look for safety or yield instead of risk.
5. Take your pick
Throw in whatever else is in the pot, Brexit, Greek bailouts, Spanish elections, US elections, inflation, deflation, the list goes on and on. It's all throws something into the mix when it comes to market moves.
You can spend an eternity trying to figure out why a market moved 30 ticks in 10 seconds or 300 pips in a day and it's unusual to only end up with one answer. There's a thousand and one reasons why a price moves, some are just bigger than others. Some reasons counter other reasons that were in effect 5 minutes ago.
Don't waste all your time worrying about the reasons why, just whether it's a sell or buy.
