China’s central bank on Monday and Tuesday injected almost 250 billion dollars into the country’s banking system. In fact, it was the only thing that kept the local stock market from crashing. And even boosted the appetite for risk around the world.
Chart of the day S&P500
The second positive side was the shares of American technology companies. Their growth dragged stock markets around the world on Tuesday. As the volatility grew strongly, a huge number of speculators, trading inside the day, returned to the market. If something goes up, they buy it, if something goes down, they sell it. Mid-term investors are trying to stay away from this process.
Yellow metal has fallen by more than $40 in the last 2 days, returning to the levels of the beginning of the year. It is possible that yesterday the last positions were closed in the stops, giving the bulls an excellent opportunity to enter the market after a strong correction.
As risk assets grew, the Japanese yen fell sharply against all major and commodity currencies. Is this optimism justified? Probably not. Of the two protective currencies, the Swiss franc has grown much stronger against the US dollar lately. So, the growth potential of the yen, when the market turns around, is huge. Especially considering the fact that the situation with the coronovirus spreading only keeps on worsening.
Oil sellers have reacted to reports that OPEC countries are holding regular consultations. What do their representatives want? It’s about reducing oil production by 500,000 barrels per day. Demand has fallen much more and continues to decline.
In fact, market participants also admit it. On Tuesday morning, oil grew by 3%, but by the end of trading it returned to the opening level.
What’s waiting for us today?
02.30 Speech by Philip Lowe, Head of the Reserve Bank of Australia
10.30 UK Service Business Index January
13.15 Statement by ECB Head C. Lagarde
16.00 ISM Business Activity Index in the US Service Sector for January
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