The election in Taiwan went according to the wishes of Americans and Europeans, with the threat of submission to China receding. A meeting of financiers took place in the Swiss resort of Davos, with the beginning of the week on the markets in a sleepy atmosphere due to a holiday in the US.
In Spite of China
A risk factor for market optimism was the weekend presidential election in Taiwan. This autonomous region has been stirring great emotions for many months, especially as it has become a battleground for the influence of two major powers: the US and China. The mentioned election was also dictated by two candidates: Lai Ching-te from the ruling party, advocating for the independence of Taiwan and Hou Yu-ih from the opposition party, expressing a desire to strengthen cooperation with China. To the delight of America and Europe, the first candidate was victorious and has already sent an appeal to China to recognize this election. Chinese authorities have long been heating up the atmosphere, even before the election, proclaiming that Taiwan is choosing between war and peace. Therefore, this topic should be watched, as the next hours might bring an increase in tension in the region which considering geopolitical frictions related to this, could be a source of deteriorating sentiment in the markets.
“Important” people in one place
This week, investors’ eyes will be turned to the Swiss resort of Davos, where the annual finance world, billionaires, politicians meeting will take place. They will probably point out the direction we are moving in. Interestingly, the theme of this year’s summit is the enigmatic slogan “restoring trust”. To whom or to which institution, we do not know, it can be assumed that it should be about central bankers, who should admit their mistakes made in the last months in their battle against inflation. However, there is a lot of talk that the main topic should be a wave of support for Ukraine in its conflict with Russia, whether there will be any major declarations, we do not know, but it is worth following this event anyway.
Hot week
The beginning of the week on the markets does not promise to be spectacular, as today’s trading is taking place without Americans due to Martin Luther King Day. However, the rest of the week should heat up investors nicely into the New Year. The mentioned issue of Taiwan or the economic forum in Davos is one thing, on the other hand, we have a lot of macro data led by the CPI from Europe or the 4th quarter GDP from China. There is still tension in the Middle East, where a coalition led by the US and the UK is attacking Huti tribal targets in Yemen, which may lead to retaliation and escalating tension, reflected in oil quotations. As for the domestic currency, this week’s trading should be dictated by external factors, as there are no data or events from the domestic market.
Krzysztof Pawlak – currency dealer at InternetowyKantor.pl
