An attempt by the President of South Korea to impose martial law failed yesterday after Parliament successfully ordered troops to stand down.
- In a very surprising move, the President of South Korea declared martial law yesterday, claiming that the opposition, which controlled the South Korean Parliament, was paralyzing the government and acting on behalf of North Korea. The President ordered troops to Parliament to arrest opposition lawmakers, but the Parliament passed a resolution overturning martial law and the soldiers withdrew. Parliament is now beginning impeachment proceedings against the President who is deeply unpopular with the public. When news of the coup attempt broke, the South Korean Won crashed and funds quickly flowed into the Japanese Yen as a haven, but these moves quickly stabilized as it became apparent the coup would fail.
- Although global stock markets are mixed, with several markets such as China recently reaching multi-month lows, some stock markets are booming, trading at new record highs. The leader is the USA, where the S&P 500 and the technology-based NASDAQ 100 Index again reached all-time highs. In Germany, the DAX is also rising powerfully. Trend traders will be interested in being long of these assets, especially the NASDAQ 100 and the S&P 500 Index.
- In the Forex market, since today’s Tokyo open, the British Pound has been the biggest gainer and the Australian Dollar the biggest loser, putting the AUD/USD currency pair in focus as it reaches a new 4-month low price. The Australian Dollar has been hammered by a combination of President-Elect Trump’s BRICS tariffs threats and the release of poor Australian economic data, notably GDP rising by only 0.3% over the past quarter when an increase of 0.5% was expected. Trump’s tariffs threats have continued to push certain BRICS currencies to record lows, notably in the USD/BRL currency pair and in the USD/INR currency pair. Another notable development has been the EUR/USD currency pair trading below $1.05 again as its long-term bearish trend continues, although at a typically slow pace.
- The cryptocurrency Bitcoin continues to consolidate below $100,000 but the price action has started to look less bearish. A test of the $100,000 level in the near term is possible, and this looks likely to be a very pivotal point.
- Yesterday’s release of Swiss CPI (inflation) data was as expected, showing a month-on-month contraction of 0.1%.
- Yesterday’s release of US JOLTS Job Openings data was somewhat better than expected, showing a more robust US labour market.
- Today will see releases of:
- US ADP Non-Farm Employment Change Forecast
- US ISM Services PMI
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