7 Jun

How the Markets Are Preparing for Super Thursday

WRITTEN BY Ricky Cove

Global events are lined up for Super Thursday

The global markets are gripping for the key events set to unfold on Thursday, June 8, 2017, the so-called Super Thursday. First, there are the UK elections that remain too close to call, and then there’s the ECB’s (European Central Bank) policy meeting that’s expected to have a less dovish stance. And don’t forget the much-anticipated testimony of former FBI director James Comey before Congress about possible Russian involvement in the US elections and the discussions he had with President Trump before he was fired.

The markets have returned to risk-off trading in anticipation of these events, with most of the global indexes closing lower on Tuesday, June 6, 2017. The S&P 500 Index (SPY) fell 0.28%, the German DAX (EWG) fell 1.0%, and the UK’s FTSE (Financial Times Stock Exchange) (EWU) fell 0.01%

How the Markets Are Preparing for Super Thursday

Risk aversion on the rise

Buying in safe havens before these events propped up the prices of gold, U.S. Treasury bonds, and the Japanese yen. Since the beginning of this week, gold (GLD) has risen ~1.2%, and the yen (FXY) has strengthened against the US dollar (UUP) by 1.0%. In times of uncertainty, investors move toward these safe havens since their prices are expected to rise if a negative outcome results in a market sell-off. The CBOE Volatility Index (or VIX) (VXX), which is known as a fear index and measures the level of volatility in the markets, has risen 7.0% since the beginning of this week, reflecting investors’ fears surrounding these market events.

Series Overview

In this series, we’ll be analyzing the possible impact of these Super Thursday events on the global markets and see how the markets are preparing for them.

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