18.10.2019 – Daily Report. That was probably nothing: The DAX had started yesterday hesitantly, had risen strongly in the course of the Brexit deal and then fell back. After all, a new annual high of 12,814 points remained on Thursday. Increasing doubts about the new Brexit agreement are now putting the brakes on the market. And shareholders are looking for clear targets.
Frankfurt waits
Hardly any news on big topics. In addition, the small expiration date for stock index options, which caused a little tugging in the prices. The DAX oscillated to Friday noon 0.1 percent firmer at 12,669 points. As expected, the announced American punitive tariffs on imported goods from Europe – Airbus jets, wine, whisky and cheese – will come into force.
Brexit vote on Saturday
At the British Pound and also at the FTSE 100 it will be exciting again on and after the weekend. The vote in the House of Commons tomorrow, Saturday, is completely open. British Prime Minister Boris Johnson has to fight for a majority in parliament. Above all Labor and the Northern Irish DUP are resisting. Sterling is currently an ideal playing field if you trade CFD: Over the past ten days, the pound has fluctuated between 1.1089 and 1.1631 against the euro.
The Red Dragon Weakens
Meanwhile, investors in Asia were looking at surprisingly weak data from China. The trade dispute with the U.S. and the meagre domestic demand have pushed economic growth to its lowest level in almost 30 years. Gross domestic product in the People’s Republic grew at an annual rate of only 6.0 per cent in the third quarter, compared with 6.2 per cent in the previous quarter and 6.4 per cent in the first quarter. The plus thus reached the lower limit of the target corridor for the year as a whole of 6.0 to 6.5 percent set by the government. Another problem is the growing level of debt. As always, you can find all the data here: Market Mover
CSI-300 and Yuan under pressure
Accordingly, the CSI-300 fell by 1.4 percent to 3,872 positions. In Tokyo, on the other hand, the Nikkei-225 recorded a plus of 0.2 percent to 22,493 points.
According to China data, USDCNY slipped slightly to 7.0778. In April, a dollar was still available for only 6.69 yuan. The Chinese currency thus remained below the 7.0 mark, which the USA had drawn as a red line in the trade dispute – this was torn again in August for the first time in a decade. Washington accuses Beijing of currency manipulation, i.e. the artificial lowering of the yuan to push stuttering exports. Obviously, rich Chinese and investors with large Yuan assets see it the same way. Finally, a veritable capital flight from China has started through the back door, through unofficial channels, as the Wall Street Journal recently reported. How does that work? Besides the smuggling of dollars and gold, think of auctions of Chinese antiques in New York, London or Paris with exorbitantly high prices and surcharges, for example.
Moderate growth in New York
The Wall Street stock market had been cautiously seizing the eve of the meeting, pushed by rather positively received quarterly figures. The Dow Jones closed 0.1 percent higher at 27,025 points. The S&P 500 gained 0.3 percent to 2,997 points. And the Nasdaq Composite even climbed 0.4 percent to 8,156 points.
Recovery in Turkish lira
The Turkish lira attracted. After President Recep Tayyip Erdogan initially refused to meet US Vice President Mike Pence – Donald Trump was the only one – the meeting took place. And the USA forced Turkey to a ceasefire in Northern Syria. The Kurdish militia YPG was to withdraw from the region within 120 hours. After the five days the Turkish offensive is to be stopped completely. The USA wants to lift their sanctions in case of a permanent ceasefire in Northern Syria. Turkey would also have achieved its goal and set up a buffer zone.
This is what the day brings
US quarterly figures for the weekend include Coca-Cola and American Express.
At 4pm the US index of leading indicators for September will be announced.
Otherwise several responsible persons of the Federal Reserve will speak, which could move Treasuries and the Greenback in addition to US stocks.
At 3pm the President of the Dallas-Fed, Robert Steven Kaplan (2019 not entitled to vote in the FOMC), will speak.
And at 4pm Kansas City Fed President Esther L. George steps up to the microphone at the same conference in Denver (2019 voting in the FOMC).
The next speaker will be Vice-Chairman Richard Clarida at 5:30pm.
The Bernstein Bank wishes you successful trades!
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