The major issue is still around the Irish border and the British Pound is paying the price for that. The ongoing tensions in Saidi Arabia may effect the FDI
How Low This Sell-off Will go
US markets posted their worst weekly performance and the questions for traders is if this will continue this week? It is always difficult to figure out if the current sell-off is only a healthy correction or if this is going to change into some much bigger. One way of finding this is to look at the price action if we start to see major downward moves for the index, and the momentum continue to build up then it means that the current sell-off is going to get ugly. On the other hand, if the selling momentum continue to fade off, it is clearly an opportunity for those who have been sitting on the sidelines,
British Pound Continue to Look at Bexit
Once again, there is no luck for the British Pound, the currency is mostly consolidating as the Brexit talks have not yielded any favourable outcome and now all eyes will remain on the upcoming Brexit summit which is taking place on Wednesday. The major issue is still around the Irish border and this stalls the Brexit discussions and as along as we do not have any clear decision on this, we think that traders may not commit to any big bets. There is no important economic data due today so Brextio will remain the key focus here and it is likely that we may break below the 1.31 mark.
Geopolitical tensions And Saudi Arabia
Saudi Arabia doesn’t look the most promising investment any more. In fact, the fund and firms which are involved or associated with Saudi Arabia are getting punished. Soft Bank which has produced a fair bit of positive headlines in relation to various corporations with Saudi Arabia is paying the price- its stock is down. But it is important to keep in mind that structural changes do not take place overnight, it takes time for this kind of changes to take effect. But if the geopolitical tensions continue to persist, it creates more obstacles for foreign direct investments.
Saudi Arabia can certainly play the same political game with the U.S. which it played in 1973- the oil embargo. But it needs to understand that the U.S has changed the landscape of the oil market massively, it is producing nearly 10 million b/d of oil. President Trump has already said that he thinks that it will be foolish to cancel the arms deal with the country. This indicates that that the U.S. is only interested in its own interest.
