Anna's Financial Market Analysis

With the US now back open for business, and the NFP data duly released, markets can at least return to normal following round 2 of the fiscal cliff soap opera. But what is normal? Can anyone truly believe these statistics, and with equity markets surging higher, the disconnect between economic reality and risk assets seems set to continue. For the trader, it's simply a case of watching the right charts such as the VIX and trading with a leading indicator, such as volume.

Round two of the fiscal cliff saga has once again opened the old debate and the the role of the US dollar as the currency of first reserve. Leading the way are the Chinese, suggesting that a 'de Americanised world' might be more appropriate - perhaps the yuan could be used instead? This is all seems highly unlikely and no doubt once the current situation is resolved, and it will be, the status quo will be established once again. For the foreseeable future, the US dollar remains the currency to watch, and in this weeks episode find out why and how.

This is a story of one of the great inventors and visionaries of our time, and yet few people are aware of his name. He died penniless and alone, and yet without his genius, life would be very different today. It is ironic therefore that his spirit has returned, this time with another visionary who is looking to take on the motor industry in his name!

This week is dominated by politics and brinkmanship. The fiscal cliff beckons once again, and no doubt a last minute resolution will be achieved - but if not, the NFP data on Friday could be a little thin! In Italy Silvio is trying to stay out of jail, and the ECB is also trying to do the same for the euro! Chinese data dominates along with Australia, so a great deal of focus on risk and risk assets. All in all, another interesting week for the markets, which appear, for the time being at any rate, to be taking a sanguine view to the whole business.

The USD/JPY is creating an exciting pattern on the weekly chart as the pair consolidate and prepare to breakout. But when? The USD/JPY is a key barometer in the forex markets for risk appetite and now appears to be waiting for that all important catalyst.

The key this week is the FOMC meeting, as the markets once again await the FED decision on tapering. However, given the less than stellar NFP data, the FED is caught between a rock and a hard place! Worse still, nobody, least of all the FED, has any idea whether the continued bond buying programme will have any benefits at all!!

Discover the indices to watch, which reveal the market mood in terms of risk and market sentiment. Two of the most powerful charts which reveal where the fulcrum of 'risk on' or 'risk off' is currently positioned.