Trading Journal

It should be recalled that the rise in inflation, which reached 2.0% last month (the ECB target) triggered some expectation regarding the possibility of a faster withdrawal of stimulus from the Central Bank, as well as a change in the interest rates of reference. However, the ECB has not been confident of a sustained rise in prices, especially after data confirming that underlying inflation remained subdued. Investors will also take advantage of the speech by Mario Draghi, President of the ECB, to look at more details on the monetary policy conducted by the ECB.

Investors are reacting to a mixed employment report, statements by Fed members as well as the geopolitical environment, after the US launched a military offensive against Syria. The employment report showed that only 98 000 jobs were created during the month of March, despite the unemployment rate falling to the lowest of the last 10 years, from 4.70% to 4.50%.

Politics begins to gain weight among the issues facing investors this Easter, as the first round of the French elections, scheduled for April 23, approaches. According to the latest polls the distance between Jean-Luc Mélenchon and Emmanuel Macron is narrowing.

The US indexes closed at modest losses, managing to recover a sharp share of the devaluations seen earlier in the session. The main catalyst for the recovery was the intervention of President Trump who said he would be willing to replace the Dodd-Frank law with another law. Again, Donald Trump's words were somewhat vague, having failed to advance what the outlines of the new law would be. This news was enough for the financial sector to end up with minimal losses (-0.07%), not reflecting the sharp decline in yields observed in recent sessions.

Geopolitical uncertainty (especially that related to the Korean Peninsula) continued to weigh on Asian markets. Although not the central theme of the current situation, it should be noted that Chinese exports increased by 20.30% in March, up from an estimated 15.50%. In turn, imports grew by 16.40% compared to forecasts of only 4.30%. Although these variations may still have been influenced by seasonal factors are important signs of strength that the Chinese economy is giving.

Last Thursday investors' apprehension about the geopolitical situation in the Middle East and the Korean peninsula has resulted in a greater aversion to risk, especially since only European equity markets will reopen on Tuesday.
In this context, it has become uncomfortable for many investors to assume excessive exposure to risky assets.
Thus, there was a sale of this type of asset, whereas the gold and the bonds of the states considered more secure were much sought after.

People feel most comfortable in a congestion or a consolidation area, but this may be the most dangerous place to be. So it would be logical to conclude that trading outside the comfort zone shall be the safest and correct one.

Asian stock markets ended in different directions in an environment influenced by geopolitical tensions. US Vice President Mike Pence's visit to Asia continues to be monitored by investors. In the Japanese market, banks recorded gains of over 2%, with Nomura leading the valuations.

Theresa May's decision to call for elections in early June surprised investors yesterday, who only expected the elections to be held in 2020, as previously advocated by the British Prime Minister. This decision could increase political uncertainty in Europe and is another obstacle that the rally of the markets of the Old Continent will have to overcome. In fact, these elections will follow the presidential elections in France (23 April and 7 May) and precede the parliamentary elections in France (11 and 18 June) and Germany (24 September).

Asian markets ended modest gains as investors reacted to corporate earnings on Wall Street and after the price of oil rebounded from the low seen in the last two weeks, explained by the release of inventories of this raw material in the US. At the same time, tensions between the US and the Korean Peninsula continue to influence investors' sentiment.

In the pre-opening, the European markets were negotiating in different directions, after the attack that happened yesterday in Paris which aggravated an environment of quite uncertainty in two days of the presidential elections in the country, an event that has been accompanied by all Financial markets players. In fact, this election is highly uncertain given the complexity of the current situation and the fact that the polls point to four candidates with very close voting preferences. Last week saw an increase in put options on the Eurostoxx 50, signaling that several institutional investors have used these financial instruments to protect their portfolios from hypothetical adverse scenarios. In other words, several investors have already reduced their exposure to French assets, anticipating the occurrence of hypothetical unfavorable scenarios.

During the Asian session, the Euro reached a high of the last five months, favored by the increase of the degree of confidence regarding the victory of Macron, a defender of the European Union. In fact, for the second round, investors, supported by the vast majority of polls, estimate a comfortable victory for Emmanuel Macron, however, the occurrence of possible terrorist attacks could favor the rhetoric of the far-right candidate.

German business morale brightened more than expected in April, hitting its highest in nearly six years, a survey showed on Monday, suggesting company executives are more upbeat about the current state of Europe's largest economy. The Munich-based Ifo economic institute said its business climate index, based on a monthly survey of some 7,000 firms, rose to 112.9 from an unpwardly revised 112.4 in March. The reading, the highest since July 2011, came in stronger than a Reuters consensus forecast for a value of 112.5.

The US market also received positively the results of the French elections.
The financial sector was the leader in the S & P 500, while the Nasdaq Composite reached a record high.

The Nasdaq Composite index broke the 6,000-point barrier for the first time, 40 percent of which is influenced by five major companies (Amazon, Facebook, Netflix, Alphabet and Apple). In turn, the Dow Jones has temporarily outperformed 21,000 points, with Caterpillar and McDonald’s being the biggest catalyst for gains.

In the pre-opening, the European markets traded slightly lower. In addition to the business results, the day will be marked by the European Central Bank meeting. The Central Bank is expected to maintain the broad outlines of the latest releases, although it may not be possible to change some nuances in order to prepare the financial markets for a deeper modification of its message in the coming months when the ECB announces that it will stop with the measures of Liquidity generation. This scenario has already been discussed within the Central Bank, with the members of the Northern European countries advocating a faster monetary policy change, which contrasts with Mario Draghi’s more moderate stance and the other members of the Executive committee. Tomorrow will be known relevant economic data to the economy of the Euro Zone, such as inflation for April, as well as GDP in France and the United Kingdom.

Do you know where I can watch the ECB press conference online?

Today will be published the first reading of the GDP of the first quarter of this year. The improvement in economic sentiment did not translate into a sharp increase in the real economy. The index of coincident economic indicators (whose denomination comes from the fact that their cycles coincide with those of the economy and as such a reliable sample) rose from 180.60 at the beginning of the year to 182.29 in March, a mere advance of 0.93%.

Many of the factors that influence performance, even among expert performers, are situational and not part of fixed personality traits. What we perceive and how we respond are greatly influenced by the environment. A full understanding of a trader’s performance requires an appreciation of the specific situation in which the performance was embedded.