The Financial Times has recently reported that FTSE100, which stands for the London Stock Exchange’s 100 largest companies, will be affected by the global economic slowdown. This comes as no surprise considering how the global credit crunch that has been taking place in recent months has had a negative effect on other parts of the financial world. However, the question is whether this kind of impact will be felt by FTSE100 Index futures in the near future. And if so, what should one do?
To begin with, it is important to understand that oil prices and oil production are tied closely to the prices of currencies. Thus, the slowdown in China and the slowing in the US economy both have a direct impact on the price of oil. The same goes for the upcoming talks between Iran and the Western world. All these factors point to the fact that the global economy will be forced to undergo significant adjustments, possibly in the next two to three years.
However, it is not at all strange that FTSE100 Index futures trading would experience a slowdown given the recent slew of negative economic reports around the globe. After all, when economies get weaker there is usually a great deal of turbulence within the market. Even though commodity prices are affected by economic conditions in different ways, there are still inherent risks that investors take note of. One of these risks is related to what some analysts call “shale-ization.” This phenomenon refers to a phenomenon where emerging markets such as China open up a huge potential for oil and gas sector exploration and production.
This means that oil prices are likely to increase in the next few months. But is this a suitable environment for investors who trade FTSE100? It would be a mistake to completely put your hopes on oil prices to rise sharply again in the near future. What is more important is that traders look for situations where the market is flooded with cheap oil and gas options, which can help them profit from the situation and avoid heavy losses.
To illustrate how this plays out for the FTSE100 index futures market, let us take a look at the recent changes in the oil futures prices. The price per barrel of oil actually dropped by more than five percent over the course of the past year. This is good news for those who invested in oil futures contracts. However, the good thing doesn’t stop there. If you were able to purchase oil futures at a very low price, you would quickly be able to sell it for higher profits. In fact, given the current state of the economy, you would even be able to profit from oil prices moving upward.
If this scenario sounds familiar, you might want to turn to an online futures broker in order to complete your transactions. Since the price per barrel of oil has been dropping, there are many options available to you. If you are planning on using the FTSE100 index to trade, you may want to think twice about this option. It may not be the right time yet for you to invest in oil futures contracts. Instead, you should focus your attention on other currencies that are showing signs of strength like the Swiss franc and the Australian dollar, both of which have been rising against the US dollar in recent times due to some economic indicators.
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