Davos and world economic news

By 22/01/2020News
Morning Stock News

Gold   1552,11

EURUSD   1,1084
( +0,03%)

DJIA   29299,50

OIL.WTI  58,14

DAX   13524,99
(+ 0,01%)

Yesterday, the World Economic Forum opened in Davos. More than fifty statesmen, including the President of the United States and the Chancellor of Germany, will take part in this event. The main topics of discussion will be the problems of climate change, correction of the “broken” system of economy, as well as preparing for environmental work of the future.

GBP/USD Day Chart

Of course, this event will be closely watched by investors. In such forums new business ideas are born, problems are solved and strategic decisions are made. We are waiting for loud statements from world leaders.
Meanwhile, a new coronavirus is gaining momentum in China, which keeps the whole Asian region in suspense. American and European markets reacted nervously to the situation in China and traded in mixed dynamics.


GBP/USD pair shows good dynamics last days. Yesterday, on the unemployment data, the pair reached the resistance level of 1.3080, which is the upper bound of the two-week descending channel. However, it should be noted that by the end of January, the UK is expected to leave the European Union, after which the stage of trade negotiations will start, which may take longer until the end of this year. If the December GDP of the kingdom shows negative dynamics, this trend will bring the UK closer to economic recession. The combination of these factors may negatively affect the GBP and return it to the December lows at 1.29.


Two weeks later, when Brent suffered the biggest fall in recent years, the market for petroleum products faces a new crisis. Yesterday Libya announced that it was reducing oil production from 1.2 million barrels per day to 72,000 barrels per day. Such statements and refusal to ship oil from major fields may seriously affect the market. However, there is a possibility that Libyan risks may be insignificant on the data on gasoline and distillate reserves in the USA, which turned out to be significantly higher than predicted. At the end of Tuesday trading session Brent was traded at $64.25 per barrel.

What is waiting for us today?

10.30 Net borrowing in the UK public sector
14.30 Chicago FRS National Activity Index
14.30 Canada’s basic consumer price index for 2019
16.00 Bank of Canada interest rate decision

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. 68% 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.