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News

morning-news

What will happen to the pound?

By | News | No Comments

Gold 1773,45
(+0,26%)

EURUSD 1,1649
(+0,16%)

DJIA 35330
(-0,03%)

OIL.WTI 82,03
(-0,51%)

DAX 15490
(+0,01%)

The Bank of England is seriously concerned about raising interest rates. On Sunday, its chairman Andrew Bailey stressed, not for the first time, that the central bank “will have to act” as rising inflation becomes a problem. What does this mean for the pound and the traders who trade it?


GBPUSD

GBPUSD

Since last week the Bank of England has been actively signalling to the market that it is time to raise rates. Although everyone has inflation on the rise, even the Fed is in no hurry to raise rates (but is preparing to roll back bond purchases).
And while the Fed and ECB argue that rising prices will still be temporary, Andrew Bailey says that inflation above 2.0% is worrisome, which means it must be dealt with to prevent such levels becoming chronic.
The Bank of England interest rate is now at a record low of 0.10%. But the markets already estimate a 90% probability of a 25 basis point increase at the November meeting. By February the rate could rise by 50 basis points.
And how is the pound reacting to this? It would seem that with such hawkish statements, sterling should be on the rise. And it is. But somehow it is sluggish and mostly at the expense of a falling dollar index.
So what is it? Judging by the statements of the other members of the Monetary Policy Committee, not everyone supports such a radical Bailey plan. This means that the Governor of the Bank of England will have to work hard to persuade his colleagues to vote for a rate hike.
And even if that happens, it will probably not be unanimous. But so far, judging by the reaction of the pound, market participants prefer to proceed cautiously.
What should traders do now? Based on the technical picture, GBPUSD still has room to move up to the 1.4000 area if it manages to pass the current resistance near 1.3800.
Above the level of 1.4000 the pair has not been above since mid-June, and if it manages to consolidate above this level, the next target for strengthening will be near the highs of February and May (~1.4200).
And if the Bank of England does indeed raise the rate at the next meeting, sterling could go up in earnest. But, let’s not get ahead of ourselves, there is not much time left until 4 November.

08.00 UK consumer price index for September
11.00 September Consumer Price Index for the Eurozone
14.00 Canadian September Consumer Price Index


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

morning-news

2 reasons why gold is not rising

By | News | No Comments

Gold  1770,99
(+0,16%)

EURUSD   1,1591
(-0,10%)

DJIA  35191
(+0,06%)

OIL.WTI  82,805
(+1,39%)

DAX  15579,50
(+0,01%)

With inflation at its highest since the 1980s, the gold metal serves as the last bastion against growth. Indeed, oil, metals, timber, foodstuffs are getting more expensive. Anything. Except the asset, which, as we are taught in books, must grow first. And not just because of inflation, but because of the huge issue of paper money. Why is this happening?


XAUUSD

XAUUSD

It seems to us that there are two main reasons.
1. How is the price of gold formed? It is based on futures contracts. And also paper gold, in the form of ETFs, which are traded on stock exchanges.
What is wrong with this pricing? The point is that you cannot buy physical gold on an exchange. You just buy receipts. And the volume of receipts traded is a hundred times higher than the volume of physical gold that is produced in a year. Of course this is completely absurd. If the buyers would demand to exchange the given volume of paper gold for the physical metal, the price of the latter would increase by 10 times.
However, ETF holders cannot demand this metal. States and central banks do their best to keep the price of paper gold from rising. By the way, it is easy enough to do. You can sell an unlimited number of futures contracts on it. It’s just a receipt, not a real asset.
Why do the governments of the world’s major countries and central banks need this? If you let gold float freely and stop manipulating its price, the following will happen. The price of gold will not just increase several times. Not only that, but buyers will want the physical metal. And then it will quickly become clear that there is far less of it (even at the higher prices) than the quantity required for delivery.
But the most important thing will be (for governments) something else. Investors will realise how much paper money has depreciated in real terms. And they will start to sell off government bonds by investing in rising gold. And this threatens to cause huge problems with the servicing of government debt.
2. Of course, bitcoin is also to blame! In fact, investors are exchanging old gold for new digital gold. And with the introduction of bitcoin ETFs, this process only threatens to accelerate. Most likely, this will not lead to a drop in the price of the yellow metal. But it will make it easier to manipulate its price.

04.00 China retail sales for September
04.00 China’s GDP for September
15.15 US industrial production for September


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

morning-news

Why is bitcoin rising? Part 2

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Gold  1790,74
(-0,10%)

EURUSD   1,1589
(-0,08%)

DJIA  34366,50
(+0,34%)

OIL.WTI  80,415
(-0,20%)

DAX  15261
(+0,02%)

The first cryptocurrency has risen 30% in the last month, coming close to the $59,000 per BTC level. There are 2 reasons contributing to this move. The day before yesterday we told about one of them. Today the second one is on the line.


BTC

BTC

Many of us have probably heard that BTC is rising in value amid talk of the approval of the first cryptocurrency ETF by the US Securities and Exchange Commission (SEC). The latter has refused for 3 years to allow at least a dozen different companies to launch ETFs.
Apparently the situation has now changed. This is evidenced by 2 factors. First, SEC Chairman Gary Gensler announced that it is possible that an ETF will be allowed to launch, based on bitcoin futures already traded on the Chicago Exchange in the US.
And the second factor is the rapid growth of BTC. Apparently, insiders are buying the first cryptocurrency in huge volumes, as they know about the approval of a bitcoin ETF launch in the near future.
Why is this so important for the market? The fact is that a huge number of potential investors in the first cryptocurrency are still standing on the sidelines. They are simply not ready to put money into cryptocurrency exchanges. Or to open cryptocurrency wallets. These are huge risks. An exchange can be hacked by hackers. And the cryptocurrency wallet could be zeroed out through phishing or its password could be lost.
The launch of ETFs removes these risks. Investors will be able to buy “paper bitcoin” the same way they buy “paper gold” or ETFs on stocks. And that’s hundreds of millions of investors around the world.

What’s more! For many, the following strategy becomes available. When once a month from each paycheck, a portion of the money is put into a specific ETF, such as SPY. The strategy is extremely popular. It ranks first in terms of simplicity and the path to financial independence.
Now let’s imagine what would happen if 10 million investors started buying $100 or $1000 ETFs once a month. That’s $1 billion or $10 billion. And so every month, year after year. The numbers are simply astronomical. In such a scenario, a price of $1 million for 1 BTC in 20 years doesn’t seem too high anymore.

14.30 US retail sales for September
16.00 US University of Michigan Consumer Confidence Index


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

morning-news

Will oil reach $100 a barrel?

By | News | No Comments

Gold  1790,74
(-0,10%)

EURUSD   1,1589
(-0,08%)

DJIA  34366,50
(+0,34%)

OIL.WTI  80,415
(-0,20%)

DAX  15261
(+0,02%)

This is a question that increasingly interests trend-following traders. And it is increasingly frightening for bears holding short positions with shoulders. It would seem! Just over a year ago we saw black gold at minus $37 a barrel. And analysts warned that we might never see a $50 price again.


OIL.WTI

OIL.WTI

Black gold is always ready to surprise. And it is least interested in analysts’ opinions. WTI crude is close to the highs seen back in 2014. What can we expect next?
A year ago, the answer was known. For any surge in the price of black gold, there was a surge in oil production by shale producers. The beauty of shale production is that it is possible to both freeze operating wells and reopen them quickly enough.
The situation today is different. If you pay attention to the number of open rigs, you can see that there are half as many as there were three years ago. At that time, the oil price was at about the same level.
Most likely, the shale producers have realised that as soon as they ramp up their oil output hard, there is a collapse to $30-40 a barrel. Of course, nobody wants that. The price war can’t go on for long. Well, or it can, but there are fewer survivors (I mean primarily the American and Canadian shale companies that are indebted to them). This is why shale producers do not want to hinder further growth of oil prices right now.
There is a second important point. $80 per barrel of WTI oil today is not at all the $80 that companies were getting three years ago. Inflation in logistics, industrial equipment and wages is much higher than consumer inflation of 5% in the US. Which means that part of the price increase is based on that factor alone.
In the first quarter of 2022, especially in the event of a cold winter in the Western Hemisphere, we could see the bulls attempt to push prices to $100/barrel, to remove a huge amount of stops. That will probably be the limit of this oil rally.


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

morning-news

Why is bitcoin rising?

By | News | No Comments

Gold  1761,335
(+0,10%)

EURUSD   1,1551
(+0,18%)

DJIA  34260,50
(+0,16%)

OIL.WTI  80,535
(+0,02%)

DAX  15136
(+0,01%)

The first cryptocurrency has risen 30% in the last month, coming close to the $58,000 per BTC level. There are two reasons contributing to this move. They are crucial to understand what will happen in the coming years. So let’s focus on one of them in more detail today. And in upcoming articles on the other one.


BTCUSD

BTCUSD

El Salvador has officially recognised bitcoin as a means of payment. Everyone has heard about it. But few have analysed the dynamics. And it is disastrous for the first cryptocurrency’s enemies.
The small state in South America is landlocked. The population is poor, even by the standards of Brazil and Argentina on the same continent. And almost 50% of families receive remittances from more fortunate relatives working in the US.
These remittances are probably where it all started. International payment systems such as Western Union charge a 5%-10% fee for the small amounts of remittances that Salvadoran citizens receive. But that’s hundreds of millions of dollars every year that just goes to waste in an already poor country.
Now all these commissions are effectively nullified. And all the money stays with the residents receiving the transfers. Yes, that’s not enough. Recognition of cryptocurrency means being able to pay for everyday goods and services with it. This has been made possible by the government, through a mobile app. Most of the country’s citizens have installed it.
And now for the worst nightmare for the IMF and central banks printing empty money. It turns out that 4 times more BTC is flowing into the wallets of Salvadorans than is going out. This is very, very important. That is, uneducated citizens, most of whom don’t even have a bank account, have realised the truth. Bitcoin, in their case, is not only a form of receiving transfers from abroad from relatives. It is also a substitute for banks + a means for investing, which they have been deprived of throughout their lives.
We’ve heard a lot of opinions on whether or not bitcoin is needed by the common people of planet Earth. In El Salvador, a real-time experiment has been put in place to show what’s in store for us in the coming years. Bitcoin will be recognised in many countries around the world. And their populations will start using it as a means of savings. And the more it is saved, the faster the price of the first cryptocurrency will rise.

08.00 German consumer price index for September
14.30 US Consumer Price Index for September
20.00 US Federal Open Market Committee meeting minutes


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

morning-news

The stock market has started to revive

By | News | No Comments

Gold  1769,82
(+0,81%)

EURUSD   1,1567
(+0,11%)

DJIA  34603
(-0,12%)

OIL.WTI  78,85
(+0,01%)

DAX  15200,55
(-0,03%)

The first trading week of October is coming to an end and it is ending on quite a positive note. There is plenty of good news in the USA regarding the economy, which restores optimism in the markets and once again makes you buy.


S&P500

S&P500

The first positive news is the clearing up of the crisis around the US national debt ceiling. There has been a proposal to suspend the national debt ceiling until early December, and the Senate majority leader has confirmed that such a proposal is likely to pass. Of course, no one thought that the government would allow a default. After all, it has been done so many times before. It would be better to abolish the ceiling altogether so as not to temporarily confuse investors. It will be impossible to stop the growth of debt in the foreseeable future anyway.
The second piece of news is that energy resources are getting cheaper. Vladimir Putin’s well timed speech about Russia’s willingness to increase gas supplies to Europe has dampened the fervour of the market and resulted in UK spot gas prices falling by almost 50% and futures prices falling by 7% over the next month. Optimism is returning. Following gas, oil began to fall. A record rise in US inventories, as well as statements by the US that it might be selling oil from its strategic reserves, put pressure on the market. As a result, oil fell to the $76 level. Demand for oil remains strong, so a correction is likely to be short.
And the third news is the virtual meeting between Biden and Xi Jinping before the end of the year. A good sign for a warming of US-China relations. Perhaps the leaders will discuss the current sanctions on Chinese companies that have been imposed by Trump. So far, Biden has yet to lift any.
Overall we can say that the backdrop is positive and the correction is probably over. Although many thought that rising bond yields would stop the stock market but the current percentage is not sufficient for that yet. For the big players to start moving into bonds, yields have to be at least 2%.

08.00 German trade balance for August
14.10 Address by ECB head C. Lagarde
14.30 US nonfarm payrolls for September


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

morning-news

Bitcoin is about to take off

By | News | No Comments

Gold  1759,64
(-0,17%)

EURUSD   1,1556
(+0,01%)

DJIA  34431,50
(+0,39%)

OIL.WTI  76,845
(-0,07%)

DAX  15048,50
(+0,02%)

While the stock market is hanging sideways, it is worth looking at what is happening with bitcoin. The first cryptocurrency is approaching the next levels, which investors will be watching closely. The positivity in the crypto market is evident.


BTCUSD

BTCUSD

There is likely to be a new period of growth for all cryptocurrencies. And here’s why. Just recently, Bank of America published a fairly large report on the prospects and trends of cryptocurrencies. According to the bank, cryptocurrencies are bringing new tools into the financial world, and blockchain technology will help develop new systems and business opportunities in the near future. One such example is the emergence of non-fungible tokens (NFT) and decentralised finance (DeFi).
The share of digital assets in investments by various companies is growing exponentially. The bank also noted that bitcoin has recently correlated better with inflation than gold. It is likely that very soon bitcoin will be used as digital gold, which is easier to buy and sell. Quicker to transfer, and also very easy to transfer or hide. The conclusion of the Bank of America report is that the world is at the very beginning of a long phase of blockchain technology adoption.
Jerome Powell’s announcement that no serious bans on cryptocurrencies are going to be imposed is an additional contribution to the current rise in bitcoin. Only the regulation of certain stablecoins needs attention.
So far, only the strong volatility of the instrument is making adjustments to its use. But as bitcoin’s capitalisation increases, its volatility decreases. Quite in the future, capitalisation will increase and there will no longer be sharp fluctuations. But as the saying goes, if capitalisation goes up, the price will go up, as there are a limited number of bitcoins in total.
Given rising energy prices, rising real estate values in the US, and inflation gaining momentum, bitcoin’s value will continue to rise. This active phase could continue until Christmas and the New Year holidays.

08.00 German industrial production for August
14.30 US initial jobless claims


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

morning-news

Barrel of oil set to go to $100

By | News | No Comments

Gold  1753,555
(-0,35%)

EURUSD   1,159
(-0,05%)

DJIA  34091,50
(-0,36%)

OIL.WTI  79,135
(+0,13%)

DAX  15155
(+0,01%)

The oil market is already up 60% since the beginning of 2021. The overbought nature of this asset is already beyond all bounds and technically there should be a reversal somewhere, but in this situation the trend is likely to continue.


OIL.WTI

OIL.WTI

The energy crisis is escalating. Gas has become so expensive that it will soon become cheaper to heat with oil-based products. The increase in production, together with the start of the heating season, has additionally made adjustments to the oil price.
All would still be well, but on Monday after the OPEC+ meeting it became clear that no build-up beyond current levels would take place any time soon. Moreover, there was not even an official statement on the current situation after the meeting. Everything remains at current levels and OPEC+ is happy with this situation. At least there were thoughts that OPEC+ would not allow oil to rise too much, so as not to taunt competing shale oil companies in the US.
The picture ahead is not yet very clear as to what levels oil could rise to. In the short term, fuelled from all sides, prices could fly quite high. As high as $90-100/bbl. Such high prices would in any case put pressure on the economy. Because of this pressure, demand for oil is likely to fall, and the price of black gold will fall as a result. For commodity markets, and oil in particular, there is a very good saying said by a fairly respected analyst – “High prices are the best cure for high prices”. And it almost always works.
It is also worth remembering that high oil prices have a direct impact on pricing. So high prices are accelerated inflation. Inflation in developed countries is now quite high and no one wants to see it go any higher.

11.00 EU retail sales YTD
14.15 ADP US private sector employment report for September


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

morning-news

A new financial year – new problems

By | News | No Comments

Gold  1751,545
(-0,28%)

EURUSD   1,1579
(-0,02%)

DJIA  33529,50
(-0,69%)

OIL.WTI  74,815
(-0,37%)

DAX  15204,50
(+0,01%)

There are more and more moments in the market which indicate that troubled times are approaching. One of these moments can be seen in the Dow Jones, which right now on the daily chart is ending its uptrend and moving into a correction phase, or into the beginning of a downtrend.


Dow Jones

Dow Jones

Unlike the S&P500 index, the DOW index includes the 30 largest US companies and shows what kind of mood investors now have towards the most powerful players in the US stock market. And the mood, unfortunately, is not a good one. If the biggest 30 companies are not growing, where will the rest get their strength from? Is the economy so strong that the big players don’t care about these companies at all?
In fact, the entire US market is now in search of some sort of vector of movement. The news buzz about the adoption of a sovereign debt ceiling is interrupting other issues that are emerging in the economy. It’s even laughable somewhere to see dignitaries talking seriously about raising the public debt limit in the US. Over the last 60 years, the flow of this debt has been raised 80 times. And here comes another moment when it has to be done “again”. Isn’t it ridiculous that it will be raised anyway? Maybe the moment should even have been cancelled in the US, because it only takes time and wastes the same public money while people are sitting. With the size of the debt, it is clear that it will go up further and for quite a long time.
The global crisis is escalating. Electricity problems in China will hit all manufacturing in the Middle Kingdom. Because China is “the world’s factory for just about everything,” there will be delays in the delivery of quite a large list of goods, which in turn will affect employment, sales and many other economic factors.
On October 1, a new fiscal year begins in the USA. New thoughts, new plans and new ideas. Usually October has always been quite positive for the markets, but will it be this year? The question remains open, given that the latest data shows that unemployment in the USA is starting to rise.

08.00 German retail sales YTD to August
11.00 EU Business Activity Index YTD
16.00 ISM manufacturing activity index in the US for September


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

morning-news

Is it the beginning of a weak Euro period?

By | News | No Comments

Gold  1732,785
(+0,39%)

EURUSD   1,1606
(+0,07%)

DJIA  34488,50
(+0,48%)

OIL.WTI  74,785
(+0,09%)

DAX  15319,50
(+0,01%)

The energy crisis in Europe is challenging the development of the European economy. The heating season is starting and there is not enough gas in storage. Gas prices have already risen above $1,000 per 1,000 cubic metres, putting strong pressure on the European currency.


EUR/USD

EURUSD

Additionally, oil prices are causing further turmoil for the Euro. It would seem that further growth in oil is being held back by already high prices, but production problems in the Gulf of Mexico as well as the emerging power supply crisis in China are keeping the price of black gold quite strongly in check. What will happen in China next is not very clear. Coal prices have soared to record levels; China is forcing production to shift to a 3-4 day work week to smooth out electricity consumption. China is now trying quite bravely to start changing its production and switching to environmentally friendly fuels, including gas and oil. This makes the whole energy market look scarce and strengthens the US dollar quite a bit.
In due course risky assets have been falling for several trading sessions. Investors are still wary of high inflation, which Jerome Powell talks about practically every time he gives a speech. And according to his statements, the high inflation zone will continue for some months to come.
Unfortunately the EUR/USD broke through the yearly support zone located at 1.1690-1.1670. Demand for the dollar is still high, as many investors have started to switch from risky assets to cheaper bonds. In the near term, a rise in the pair is possible, as the dollar is strengthening almost all September and a correction is inevitable, but a trend change can only happen after the energy market cools down.

08.00 UK second quarter GDP
14.00 German Harmonised House Price Index YTD
14.30 Annual US GDP data


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.