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Looking at the markets for Monday, without a doubt the slew of PMI numbers coming out will move the stock markets in general. We have PMI numbers coming out of France, Germany, the United Kingdom, the United States, Canada, and several other smaller countries. With this, the stock markets will be very volatile, and heavily influenced.
1 – Nonetheless, we believe that European stocks are going to go higher, as the European Central Bank continues to threaten the market with further stimulus. With that, money will be forced into risk assets. Stocks of course are one of the first places money will run 2. In the United States, the Federal Reserve has step away from the possibility of interest-rate hikes, and that of course should continue to favor US stock markets, which are quite frankly becoming very close to busting out yet again.
2 – Precious metals in general look a little bit soft at the moment, but we believe that there will be enough support below to continue to push the markets higher. However, this point in time we believe that short-term put buying opportunities will continue to present themselves on moves lower, and of course rallies the show signs of exhaustion.
3 – The US dollar softened a little bit during session on Friday, and may continue to do so a little bit during the day on Monday. With this, we may be willing to buy calls in the EUR/USD pair for example, but on a short-term chart and we are quick to take profits.