“Join us at Twin Waters Resort, Sunshine Coast June 9th & 10th.”

There are three key economic data announcements, one in particular, that could send global stock markets falling sharply again this week. I am referring to the US Inflation data that is due out on Wednesday with a better than expected inflation reading likely going to see traders price in faster interest rate hikes and this will once again push up the 10 Year US Treasury Yield. The rising 10 Year US Bond Yield has been the major reason why traders have been selling down stock portfolios.

The other two key economic data announcements I refer to are on the other side of the Atlantic but have the potential to add to the growing expectation of rising inflation around the world. UK Inflation data is due out on Tuesday and if Mark Carney the BOE Governor’s comments from last week are anything to go by we can assume this week’s UK inflation figure will at worst meet the market’s estimates. A better than expected UK inflation reading will send the Pound higher and give traders another reason to sell stocks. Wednesday also sees German and Euro Zone GDP data released and if growth is again on the rise across Europe the expectation will be that inflation will soon also be on the rise and traders will price in their expectations of higher interest rates at the ECB, which will push the Euro higher and stocks potentially lower.

The key financial market theme at the moment is equities falling due to fears of rising inflation. Don’t let anyone confuse you or try and complicate the reasons why markets are doing what they are. The facts are traders are concerned rising inflation globally will lead to higher interest rates and higher interest rates means money will come out of stock markets and into fixed income such as bonds. What we don’t need to see however is rapidly rising bond yields particularly in the USA as this could potentially send the stock market into free fall and tip countries like Australia into a recession. There is a head of steam behind the global economy at the moment unlike anything we have seen since the GFC 10 years ago, but what we don’t want is for the global economy to get ahead of itself and human beings have a very strong tendency to overshoot markets to the upside and to the downside and I have a very strong feeling we have overshot to the upside on US stocks (up 25% in 2017) and a correction must happen for the global economy to avoid another mini-meltdown. I am eagerly looking to see the overshoot to the downside as this is when quality assets become really cheap and a great buy.

TIA is not likely to take any trades today, however, is eyeing off a long GBP v USD into wave 5 from the 4-hour chart so please ensure you watch today’s video update for more details.

I am pleased to advise that LTG GoldRock’s two-day Professional Trader Boot Camp will be held on the Sunshine Coast on June 9th & 10th at the beautiful Twin Waters Resort. All the senior traders will be in attendance including Mark Austin, Cameron Malik, Alex Kozulin, Laz Bardakoz and myself. LTG GoldRock will also crown our 2017/18 Trader of the Year. Registration and booking details will be sent to all members later this week.

About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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The post Today’s Key Market Drivers: 12th February 2018 appeared first on LTG GoldRock.