Analysis

Lately, economic data releases seemed unsatisfactory. China, Japan, Europe, and even the 'recovered' US of A showed unstable performances, and it is reflected on market movements. The more the market wishes for 'good news', the harder the market fall when it doesn't happen. Not only forex market, even stock market that's usually relatively calm, now bouncing.

After FOMC announced tapering at last week's meeting, Euro and GBP closed slightly weaken against Dollar, but shortly thereafter, Euro fell to its lowest since December 2013. The reason are widespread concerns of deflation in Eurozone and turmoils in emerging markets. While GBP, although it strengthened to 1.6500s, but slipped until market opening this morning. What's wrong in the continent? Is the bearish trend going to ge worse?

The Fed have decided on cutting further 10billion USD from their stimulus program. The move was already predicted ahead by the market, and resulted in a mixed trading afterward. USD noted slight moves against its major currencies counterparts. The only suprise on the block is Yen, which is strengthening amidst emerging markets panic. Is this a mark of new trend?

There is no doubt that this week's hot issue is second round of the Fed's tapering. Although unsatisfactory NFP evoked some question on whether they are going to play the tapering game again, but some officials have stated their optimism that sooner or later tapering will continue on. Currently, there is a rising positive sentiment toward USD with negative impact already flooding on the other currencies.

EUR/USD shot to the peak in almost 4 weeks after PMI releases by Markit Economics yesterday. Eurozone PMI was at its highest since June 2011. No less impressive is German PMI, the central player in the region. For several hours, the market forgets tapering which is going to be talked about in next week's FOMC meeting.

Yesterday's China GDP growth (20/1) was lower than its previous data. 2013 fourth quartal GDP was just 7.7%, definitely lower than the previous 7.8%.

One of the most widely talked issue right now is China's weak economic datas. Many analysts have expected China's economy to enter its boiling point and, for one reason another, to experience downtrend in 2014. Barclay's criticized China's debt management and warned them of the danger of systemic financial risk in short and mid-term. Even George Soros called China as the biggest uncertainty in the world right now, because its growth model have lost its steam.

Bitcoin's reputation continue to grow. The cryptocurrency's value could go up and down in the range of more than ten percent in a day. Nevertheless, it is increasingly recognized as even Zynga, the most popular social gaming company, recently accept it as payment option. Until the end of 2013, more than 20000 online merchant and 1000 brick-and-mortar businesses accept payment in bitcoins. So, is this the time to invest in the cryptocurrency?

While Indonesians fight against rising inflation, major countries are fighting against the threat of deflation. Jay Pelosky from investment consultancy J2Z Advisory LLC said that fight in 2014 will be against deflation. The phenomenon is especially apparent in the declining trend of CPI in the EU and USA.

Gold futures trading yesterday (1/1) jotted down as the biggest slump in three decades. Bart Melek from TD Securities in Toronto mentioned that The Fed's tapering and equity market's spectacular performance have worked together against gold. Gold's reputation as safe haven continue to decrease along improvements of economic conditions. Even George Soros and John Paulson have sold their golds. What's up with gold?