News

21.10.2019 – Special Report. The dead live longer: Although US President Donald Trump Ankara has threatened Ankara to destroy the Turkish economy because of the invasion of Northern Syria, the lira is surprisingly robust. The reason for this, apart from lax US sanctions and the inactivity of Europe, is probably the support of the People’s Republic of China. The diplomatic offensive of the Chinese has potential effects on yuan, gold or oil.

Lira relatively robust

The relative strength of the lira is astonishing given the weakness of the currency previously shown. Between February and May, the Turkish lira slipped from 5.2 against the US dollar to 6.2. USDTYR has now recovered to 5.82 dollars.

And there is little sign of chaos in the currency market, even though the central bank has helped by putting pressure on the commercial banks not to lend money to short traders. Although the Turkish stock market has recently gone through some turbulence, it is still not the case that it has been. But the turmoil in the ISE 100 was mainly due to the American investigations against the Turkish Halbank, which is said to have undermined Iran’s sanctions.

China swapsfor Turkey

What probably contributes to lira stabilization is China’s intervention. As Bloomberg reported in early August, the Chinese central bank had transferred assets worth the equivalent of 1 billion dollars to Turkey in June. The investment was the highest to date under a 2012 lira-yuan swap agreement, according to an insider.

Belt and Road – China’s new Silk Road

China is also investing heavily directly in Turkey, as reported by the Nikkei Asian Review in August last year. Beijing is building a new silk road, which also includes Iran. According to “Nikkei”, China promised commitments amounting to the equivalent of 3.6 billion dollars in Turkey. Specifically, the state-owned Commercial Bank of China is to lend 2.4 billion for the expansion of roads and bridges. And another 1.2 billion dollars for the construction of gas storage facilities on the coast. The money is gradually reaching the Turkish economy.

Yuan short – Lira long

The deals are to be conducted directly in yuan and lira, bypassing the dollar. In other words: China supplies yuan, which the Turkish state sells for lira. This fits in with the downward trend of the internationally traded renminbi – and at the same time with China’s strategy of weakening its domestic currency in order to boost exports in the customs dispute with the USA. Ankara would also have achieved its goal of supporting the lira. If the Chinese private sector’s involvement continues, this will further stabilise the Turkish economy – see, for example, Alibaba and Trendyol (share purchase of 730 million dollars), the joint venture of Turkish Airlines with ZTO Express, the Chinese smartphone manufacturer ZTE and the purchase of Netas.

Dollar and ruble short – Gold long

Another consequence is the de-dollarization. Russia has already shown the way and has sold off US government bonds on a large scale. China could follow suit. And both countries – just like Turkey – are buying more gold. Russia, just like China – in contrast to Turkey – is banking on a devaluation of its own currency and, in view of the increased armament efforts and international military engagements like now in Syria, is likely to put further pressure on the ruble.

The new regional order

For China, Turkey’s support is also a means of keeping the approximately 300 million people of Turkish origin at its border quiet. Ankara likes to play the patron saint of the Turkic peoples of Central Asia, but since development aid began, it has taken a much more moderate stance on the question of the Chinese Uighurs. Conversely, China is of course now silent on Turkey’s intervention in northern Syria.
This is the new mixture: Russia, Syria, China and Iran are de facto allies. Turkey is approaching this bloc. As always, Europe is watching the bloody hustle and bustle on its own doorstep, outraged and blaming America for everything. Under Donald Trump, the USA is pursuing an increasingly isolationist course, withdrawing from endless regional conflicts and supporting only the closest allies, such as Israel and Saudi Arabia.

Shares and oillong

Paradoxically, the possible consequences for the global economy of this ice-cold realpolitik are positive. As the Cold War has shown, clearly divided blocs bring stability. If the US doesn’t squander money on armaments, the economy will recover, as Bill Clinton’s balanced budget showed after the collapse of communism – which Wall Street was pleased to see. In other words, if the spheres of influence are respected and the economy grows, then this tends to be good for the stock markets. And also for the price of oil.

Nobeautifulnewworld

Prosperity and peace for all time? Hardly. The unknowns in this equation: a new turn in US foreign policy, for instance among democrats, towards interventionism. And Iran’s disruptive manoeuvring, which is pushing for the oil market.
In addition, the population explosion prevents stability. For Turkey, this means that the Kurdish uprising should continue to simmer. As the “Asia Times” stated with reference to Turkstat’s figures from 2015, the birth rate in the Kurdish regions remains high, while it is declining among the Turks. The numberofweddingsisno different.

However, these long-term geostrategic movements you need to know when trading CFD and online stocks. The Bernstein Bank wishes you successful trades!

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.

21.10.2019 – Daily Report. The DAX has started the new week surprisingly robustly. Despite the losses on Wall Street and despite the seemingly endless Brexit story. But this could soon lead to an unexpected happy end. In addition, Beijing has for the first time expressed optimism about the customs deal.

Frankfurt wants to go up

The German stock market worked its way up at the beginning of the week. The DAX rose 0.6 percent in the morning to 12,710 points. But beware: If you trade CFDs or are active in online stock trading, you have to keep an eye on the chart analysis. There is still a price gap of 12,200 points lurking in the DAX. And such gaps are normally closed. Because a strong price jump is a sign of euphoria – and this is usually followed by disillusionment. The crucial question is when.

Next act in the Brexit drama

The theme of the day was once again Brexit. The postponement of the Brexit vote again on Saturday initially caused a small dip in the pound, but the FTSE 100 showed a moderate increase. Do insiders already know more? In fact, there was a growing hope that Prime Minister Boris Johnson’s deal with the European Union might be accepted in parliament this Monday afternoon.

First positive remarks from China in customs deal

In the second stock market long runner, the stock market players also heard positive signals in global trading. At the World Conference on VR Industry (VR: Virtual Reality) in Jiangxi on Saturday, Chinese Vice Prime Minister and Chief Negotiator Liu He said that Phase 1 of the Customs Agreement meant substantial progress in many areas. He continued: “The continuation of the escalation in the trade war benefits China, the USA and the whole world”. So far, Beijing had remained silent about the rather meagre agreement and had even demanded renegotiations. But now Liu He has supported the optimistic statements of US President Donald Trump for the first time.

Waiting for the year-end rally

Our conclusion: If the Gordian knots in Brexit and in the customs dispute between China and the USA are to break through, a flood of capital could flow into the DAX and the Asian markets on Wall Street. After all, many funds have high cash holdings that want to be invested by the end of the year. So far, however, the time has not come. On Monday, the Chinese CSI-300 rose by only 0.3 percent to 3,881 points. The Nikkei-225 also advanced in Tokyo by 0.3 percent to 22,550 points.

Losses in New York

Investors on Wall Street also held back on Friday. Losses at Boeing and Johnson&Johnson as well as weak economic data from China depressed sentiment. The Dow Jones Industrial closed 1.0 percent lower at 26,770 points. In the previous week, the Dow thus recorded a minus of 0.2 percent. The S&P 500 lost 0.4 percent to 2,986 points on Friday and the technology-oriented Nasdaq 100 lost 0.9 percent to 7,869 positions.

Mixed interest rate signals

Meanwhile, Federal Reserve leaders have dampened investors’ expectations for a new rate cut – which could mean new strength for the dollar. Robert Kaplan, head of the Dallas Fed, said Friday that he was more convinced in July and September that the Fed needed to act. Now he is undecided. Esther George, head of Kansas City’s Fed, also does not see the need for a further rate cut at the moment. In contrast, Minneapolis Fed President Neel Kashkari said monetary policy should provide some support to the economy given the risks to the US economy.
The tug-of-war in the Federal Reserve could have an impact on Wall Street: Brokers expect the Fed to lower the rate again by a quarter of a percentage point by the end of October. The key interest rate currently lies within a range of 1.75 to 2.00 percent.

This is what the day brings

All traders can now concentrate completely on politics. The calendar is rather sparse. As always, you will find an overview here: Market Mover
The Bernstein Bank wishes you successful trades!

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.

USD has been falling for the 7th day in a row, while euro keeps going up. The UK Parliament is playing one game, while the PM is playing another. Now we just have to wait for the Brexit vote, postponed till Monday.

DAX30 Daily-Chart

On Saturday, the events followed an unexpected scenario. The UK Parliament was supposed to vote for the deal with the EU or against it. Instead, the MPs voted to ask the EU for another 3-month delay – the time needed to pass all the necessary legislation. And while Boris Johnson initially stated that he wouldn’t send a delay request, he did send one in the end – though unsigned.

EURUSD

Euro kept growing regardless of what was happening in the UK. The falling USD sends investors looking for a safe haven – and in Europe, this means euro. The pound is too volatile, while the Swiss franc looks oversold. The week closed at the exact peak of the daily and weekly candlestick, indicating that growth can continue.

GOLD

The price of gold remained virtually unchanged on Friday. Volatility was low – it seems that speculators are simply selling the asset, seeing that it won’t budge in either direction.

INDICES

The main global stock indices remain stuck and waiting. Small movements inside the corridor point to a local positioning game. Nobody was willing to bet big and move the market before the weekend. Since the expected Saturday vote in the UK Parliament didn’t happen, all attention will be focused on it on Monday.

What’s next?

08:00 Germany: Industrial producer price index (PPI) for September
17.00 Statement by Andy Haldane, Executive Director of Monetary Analysis and Statistics at the Bank of England

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.

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!

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.

USD is down for the 6th day in a row – and now it broke through the key support line represented by the 200-day moving average. Lots of news and volatility for the pound today. Oil reserves are up by 9 million barrels, but it didn’t cause its price to fall.

DAX30 Daily-Chart

In the first half of the day, we learned that the EU and the UK have reached a deal (just as we predicted yesterday). As the news went live, the pound shot up almost to 1.30. That was the end of good news, though. After all, Theresa May reached a deal, too, but the Parliament would have none of it.
This time, too, the Parliament wanted to have the last word, with representatives of many parties claiming they won’t support the deal. This news caused the pound to fall by 2.5 points, though it did recover somewhat. Everyone’s waiting for the vote on Saturday. Therefore, we should expect a large gap in either direction on Monday.

EURUSD

Euro, too, benefited from the news and continued its short-term upward trend. It grew past 1.11, and there seems to be no grounds for a reversal. Especially if the Brexit deal gets approved over the weekend.

GOLD

Gold crashed after this morning’s Brexit news, but then started growing again. Investors were only too happy to buy the suddenly cheap asset. They are hedging this weekend’s risks, not knowing where the markets will open on Monday.

INDICES

Stock indices demonstrated a similar dynamics – fast growth followed by a correction. The Brexit overshadowed even the US-China trade talks.

What’s next?

The EU summit on Brexit continues
04.00 China: gross domestic product data
16.00 A statement by the chief executive of the Federal Reserve Bank of Kansas Esther George
17:00 A statement by the Dallas Federal Reserve Bank President Robert Kaplan

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.

17.10.2019 – Daily Report. Wait and see is the motto on the German stock market and in global trading. It’s quiet on the news front: nothing new in the China-USA customs dispute; unspectacular results in the current US reporting season; faltering negotiations on Brexit. The financial markets, however, should not remain in standby mode for long in view of the US economic data in the afternoon.

Hardly any movement in Frankfurt

The lake is still resting: Most investors on the Frankfurt trading floor have waited sideways. The DAX recently held its own at 12,711 points, 0.3 per cent firmer at a low volume. This also marked a new high for the year. Brokers referred to the new US economic data due this afternoon and above all to the Brexit.

Agony or breakthrough for Brexit

The British pound was once again the focus of traders’ attention. The heads of state and government of the EU are today discussing Britain’s planned withdrawal from the EU. According to media reports, both sides have come much closer. But there was no comprehensive agreement recently – if you read these lines, you may already know more. Most recently, leaders of the Northern Ireland Democratic Unionist Party had resisted the concessions on tariffs. The DUP plays a key role in the underworld as Prime Minister Boris Johnson needs his ten votes. When trading CFDs, keep an eye on the regular market updates and free real-time prices on Cable.

Asia is also waiting

Investors in Asia also did not really dare to take out cover. In China, the CSI-300 closed 0.1 percent lower at 3,920 points. The Japanese Nikkei-225 also dropped by 0.1 percent to 22,452 points.

The old suffering with ChinaDithering in New York

Wall Street had also put on the handbrake the night before. The leading Dow Jones index recorded a slight loss of 0.1 percent to 27,001 points at the closing bell. The S&P 500 crumbled by 0.2 percent to 2,989 points. And the Nasdaq Composite fell 0.3 percent to 8,124 points. Brokers immediately reinterpreted the surprising drop in US retail sales as an argument for a Federal Reserve rate cut.

Zero interest rate curse

Meanwhile, the International Monetary Fund has warned of risks on the financial market. Investors are therefore taking ever greater risks in their search for returns. The IMF judged that financial service providers outside the banking sector are particularly at risk. A loose monetary policy supports the economy in the short term, according to the presentation of its new Financial Stability Report. Due to low interest rates, institutional investors such as funds, pension funds or insurers are taking on ever higher risks.

In other words, the next crash is bound to happen because investors are looking for returns on seemingly safe assets. At this point, we had already referred to the booming US market for securitized corporate loans – collateralized loan obligations. For traders, this means the following: If you read news about disbursement problems with US pension funds or suddenly overturning major banks and insurers, then the stock market could go round very quickly.

This is what the day brings

It remains to be hoped that the incoming economic data in the afternoon will give Wall Street, DAX and co. new impetus.
At 2.30 p.m., the US construction starts and approvals for September will be received.
It will be really exciting at the same time as the weekly applications for unemployment benefits are made.
At the same time, the Philly Fed index for October is announced.
Shortly thereafter, US industrial production data will arrive at 15:15 in September.
At 16.00 the oil report of the Department of Energy follows.
The annual meeting of the International Monetary Fund (IMF) and the World Bank will also take place in Washington.
You can find our schedule here: Market Mover
The Bernstein Bank wishes you successful trades!

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.

The dollar keeps falling for the 5th day in a row — for the first time in several months. The speculators pursuing a carry trade strategy are starting to get nervous and closing their positions. The pound has set a new 5-month high.

DAX30 Daily-Chart

EURUSD

A growing wave of rumors claim that the UK and the EU have reached the final stage in Brexit talks. However, today the UK Secretary of State for Exiting the EU Stephen Barclay told the Mps that Boris Johnson may start looking at options for delaying the Brexit as early as this weekend if an agreement isn’t signed. The pound has grown to 1.288, and the 1.30 mark isn’t far away.
As we pointed out yesterday, euro powerfully broke through the 50-day MA after testing it for the past 3 days. 1.11 and 1.12 are the next lines of resistance for EUR/USD.

GOLD

Gold is up, but still not out of the narrow channel of the past few days. This absence of directed movement shows that both the bulls and the bears are somewhat confused. On the one hand, this year’s uptrend is still there; on the other hand, the precious metal has been closing below the key level of $1500 per ounce for five days in a row.

INDICES

For the stock markets, Wednesday turned out to be the least volatile day since the beginning of October. Speculators and investors are taking a pause waiting for news about the US-China tariff talks.

What’s next?

The EU summit on Brexit is about to begin
10:30 am – UK retail sales data for September
2:30 pm – US initial claims for UI benefits
8 pm – A statement from the Federal Reserve Governor Michelle Bowman

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.

16.10.2019 – Daily Report. The strong start in the US reporting season is pleasing for investors in America. And initially also the shareholders in Frankfurt. News about Brexit also gives hope. Even an about-turn from China in the customs dispute is initially calmly received.

Frankfurt running sideways

The DAX started a new summit storm on Wednesday morning, but initially did not quite make it to the top. After a strong start, the index crumbled and recently held at minus 0.1 percent at 12,624 points. Yesterday afternoon, the DAX reached its annual high of 12,682 points. The high in the morning was 12,668 points.
Investors hiked off rising European car sales as a statistical effect. According to the European industry association Acea, sales in September climbed by 14.5 percent to 1.2 million vehicles. But a year ago, sales fell by almost a quarter due to new emission regulations.
The US reporting season – above all the good quarterly figures for the third quarter from the major bank JPMorgan or the health insurer United Health had pleased investors.

Asia predominantly stronger

Most investors in Asia followed the US stock market upwards. In Tokyo, the Nikkei-225 closed 1.2 percent higher at 22,473 points. The Asia Dow climbed 0.8 percent to 3,236 points.

The Chinese stock exchange contributed a drop of bitterness, the CSI-300 closed 0.3 percent lower at 3,923 points. One reason: a law passed by the US House of Representatives to protect democracy and human rights in Hong Kong caused displeasure in Beijing. The Chinese government threatened to take countermeasures. Chinese car sales also cast doubt on some brokers: the market slipped 6.6 percent to 1.8 million cars sold. The minus in September was the 15th decline within 16 months.

Joy in New York

Brokers in New York were pleased with predominantly positive quarterly figures. The Dow Jones climbed by 0.9 percent to 27,025 points on Tuesday. The S&P 500 rose by 1 percent to 2,996 points. And the Nasdaq 100 gained 1.3 percent to 7,943 points.

The old suffering with China

Interestingly, investors ignored a new Chinese U-turn in the tariff dispute. According to Bloomberg, Beijing is now reluctant to buy agricultural products worth up to $50 billion in the US. China does not want to commit itself to this until Washington withdraws all existing punitive tariffs. But for US President Donald Trump these are the whip that forces China to keep its promises.

Grande finale in Brexit

Meanwhile, hopes remain for a solution in Brexit and a rise in the British pound. Most recently, however, EURGBP was thrown back to 1.1496, as talks were interrupted in the morning without an agreement. “Cable” remains exciting today, because Wednesday is the last day of negotiations before tomorrow’s EU summit in Luxembourg – and an agreement must be announced here, otherwise the exit date of 31 October will wobble.

Turkey in the sights

The situation remains tense for the Turkish lira. After the US sanctions of the White House in the course of the invasion of Northern Syria, which were rather perceived as lax, the public prosecutor of the Southern District of New York now followed suit. He is investigating the Turkish Halbank, the seventh largest financial institution in Turkey, for circumventing Iran’s billions in sanctions. Shortly after the news, Senator Lindsay Graham also announced that he would introduce a bill for sanctions against Turkey on Thursday.

That brings the day

US retail sales for September start at 14:30.

The NAHB index for October will then be reported at 16:00.

And at 8 p.m., the Federal Reserve presents its Beige Book.

At 10.30 p.m. German time, US crude oil inventory data from the private American Petroleum Institute will be ticked.

On Wall Street, the quarterly results of Netflix, Alcoa, or IBM are closely monitored.

As always, you can find the complete calendar of events here: Market Mover

The Bernstein Bank wishes you successful trades!

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.

The markets have come close to their 2019 highs; the pound keeps growing, while oil is down and unwilling to support the growth of risky assets. This is a very worrying signal for the black gold.

DAX30 Tages-Chart

EURUSD

The EU’s Chief Negotiator Michel Barnier has stated that a “narrow path” to Brexit is still open and an agreement could be reached later this week. It seems like the EU officials and the UK government finally reached a solution – but of course, they won’t tell us about it. However, insiders are pushing the pound up: the price has almost reached the 1.28 mark.
Euro was down at the start of the trading session, but later managed to regain lost ground. For the third day in a row, the price keeps testing the 50-day MA line. Speculators are betting on a confident breakthrough and further growth of the EUR/USD up to 1.11 and even 1.12.

GOLD

With all this positive news, gold is down again. The rumors of an upcoming trade agreement between the US and China are still being actively discussed. We’re witnessing a roller-coaster of sorts, with investors’ mood changing radically almost every day.

INDICES

S&P 500 is now a bit below its all-time high. In the very near future the index is likely to test that maximum. There’s still enough time till the end of the year for the it to gain a few more percentage points – unless a global correction happens.

What’s next?

10.30 am – UK consumer price index data for September
11 am – EU consumer price index data for September
2.30 pm – US retail sales data for September
10.30 am – UK unemployment and wages data
9 pm – A statement by the member of the Fed’s Federal Open Market Committee Lael Brainard

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.

15.10.2019 – Daily Report. The stockbrokers in Frankfurt have put on pink glasses. Wall Street is completely different. Because of the Chinese demand to renegotiate the already meagre customs deal, investors in the USA and China hesitated. After all, there were bullish signals about Brexit. And also to Turkey.

Profits in Frankfurt

The German stock market index recently held up by 0.4 percent to 12,535 points. The ZEW Indicator of Economic Sentiment of minus 22.8 hardly moved the market. As always, you can find all the data here: Market Mover

Wirecard caused a sensation: the share temporarily plunged 23 percent to a six-month low. The “Financial Times” reported that internal Wirecard documents indicated excessive sales in Dubai and Ireland. Despite everything, the German benchmark index reached its highest level since the end of July on Tuesday morning. All that mattered most recently to the German shareholders was the avoidance of an escalation spiral between China and the USA and the cancellation of US tariff increases as of today, October 15.

China demands renegotiation

Beijing had still unsettled many investors the day before. Before signing the partial agreement, China wants to hold further talks before “Phase 1” of the trade agreement can be signed. Bloomberg reported this with reference to an insider. According to this, details are to be worked out at the end of October before President Xi Jinping can sign the agreement announced on Friday by US President Donald Trump.
We continue to advise increased vigilance: If you trade CFDs or online stocks, you must keep direct market access open – and this with Germany’s best CFD brokers with a Bafin license, whose servers do not crash if the turmoil on Wall Street and the DAX breaks out. What could blossom next: China refuses to sign Phase 1 until the US cancels the next tariff increases scheduled for 15 December.

Asia rather sceptical

Investors in Asia have recently been sceptical. In China, the CSI-300 fell by 0.4 percent to 3,936 points. Although the 3 percent inflation rate in the People’s Republic raises the question of whether Beijing can really refuse a customs deal. Consumer prices reached a six-year high in September. According to the national statistics office, pork was 69 percent more expensive than in the previous year.
The Tokyo stock exchange gained ground, but after the holiday break it only caught up with the reaction to a possible trade agreement. The Nikkei index gained 1.9 percent to 22,217 points.

New York is waiting

Investors on Wall Street also stayed sideways in the face of the Chinese turnaround on the previous evening. The Dow Jones index closed 0.1 percent lower at 26,787 points. The market-wide S&P 500 also fell by 0.1 percent to 2,966 points. And the Nasdaq Composite also slipped 0.1 percent to 8,048 points. Among all three indices, there was a price gap that is usually closed. Overall, trading was quite tough due to the “Columbus Day” holiday.

Sterling on the upswing

The British pound was much more energetic: the hope for a rapid Brexit compromise pulled “Cable” upwards. EU chief negotiator Michel Barnier described an agreement as possible this week. According to the channels RTÉ and BBC, London had submitted new proposals on the Irish border issue. So GBPEUR and GBPUSD remain exciting.

Relief in Istanbul

Relief also spread to the Turkish lira and the Istanbul stock exchange. Brokers saw the US sanctions as moderate after the invasion of Syria. For example, Washington imposed a duty of 50 percent on Turkish steel imports and stopped trade talks with Ankara over goods worth 100 billion dollars. The US Treasury also blacklisted the Turkish Defence Minister, the Energy Minister, their two ministries as a whole and the Home Secretary. This would allow possible assets in the USA to be frozen and business to be done with them. Was that it now or is something yet to come? Traders should keep a close eye on ISE 100, EURTRY and USDTRY.

This is what the day brings

In the early afternoon, US banks Citigroup, Goldman Sachs, JPMorgan and Wells Fargo are going to open the reporting season.
The Empire State Index for October will be published in the USA at 2:30pm.
Additionally at 3pm the European Central Bank’s weekly financial statement will follow.
The Bernstein Bank wishes you successful trades!

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.