12.09.2019 – Daily report. Wait and see in Frankfurt – investors in Frankfurt are hoping for a massive monetary policy programme from the European Central Bank by Mario Draghi, the outgoing head of the European Central Bank. In addition, US President Donald Trump sent a signal of goodwill to Beijing in the customs dispute.
Moderate DAX gain
More and more optimistic speculations about the extent of the new money injections have been circulating on the Frankfurt floor recently. Nevertheless, the DAX lost its early gains and rose only 0.1 percent to 12,374 points. This is not surprising: If you trade CFDs or are active online in stock trading, you should consider a possible disappointment. Or the fact that the market could react with a “sell the news” – after all, the DAX was heading for the seventh profit day in a row. We know more at 13:45.
Grande Draghi Final
Many brokers are hoping for a last big shot from the head of the ECB, which will help the shares to rise strongly. Not only with a bazooka, but perhaps even with a big Bertha. After all, Mario Draghi first raised some expectations at the central bank meeting in Sintra and then at the latest ECB meeting in July. A further reduction in the deposit rate for banks is now priced into the financial market; it is already minus 0.4 percent. In addition, the resumption of the purchase program for bonds with a volume of 20 to 30 billion euros per month is a foregone conclusion for many stock market participants. If not, the DAX is likely to plummet and the euro will rise.
Customs dispute gesture by Trump
US President Donald Trump was delighted with the second major stock market theme. He twittered on Wednesday that as a gesture of goodwill he would postpone the increase of tariffs for Chinese goods worth 250 billion dollars from October 1 to October 15. The increase is to take place from 25 to 30 percent. The step was taken at the request of Deputy Prime Minister Liu He against the background of the 70th birthday of the People’s Republic of China. By the way, China showed little gratitude: The Middle Kingdom has just concluded an agreement with Argentina on the first import of soya and has thus hit the US farmers.
In the People’s Republic, the CSI-300 rose by 1.1 percent to 3,972 points. Japan’s leading index, the Nikkei 225, closed 0.8 percent higher in Tokyo at 21,760, and at times climbed to its highest level for more than four months.
Winnings in New York
The US stock exchange officials are counting on a solution to the customs conflict and attacked courageously on Wednesday. The Dow Jones gained 0.9 percent to 27,137 points and closed at its high for the day, its sixth consecutive gain. The S&P 500 gained 0.7 percent to 3,000 points. The Nasdaq Composite rose 1.1 percent to 8,169 positions. Once again Trump wedged against the US central bankers, whom he described as fools – they were finally supposed to lower interest rates.
Series of hits against the oil bulls
The bulls in the oil market had to put up with several violent blows. Initially, the Energy Information Agency’s inventory data was mixed – as usual, you can find all the data here: Market Mover
In addition, the announcement in the market that the Russian central bank considers an oil price of 25 dollars to be possible for 2020 was being prepared. This was only one possible scenario. But who knows – perhaps there is a Kremlin strategy behind it to conquer market shares in oil with a low price. In line with this, deeper cuts in OPEC’s oil production seemed to be off the table, at least at the meeting in Abu Dhabi there was no real determination to do so.
According to Bloomberg, US President Donald Trump actually discussed the relaxation of sanctions against Iran and even a meeting with Iranian President Hassan Rouhani. That was the real reason for the departure of security advisor John Bolton. The hardliner exploded in the Oval Office on Monday when Finance Minister Steven Mnuchin supported the plan to renegotiate with Iran, they said, citing unnamed sources. This means: It is possible that Iranian oil will again come onto the market in larger quantities.
This is what the day brings
In addition to the ECB meeting, there are two other relevant dates in the calendar.
At 2:30pm US consumer prices for August are due.
At the same time, the first weekly applications for unemployment benefits in the USA will run over the tickers.
The Bernstein Bank wishes you successful trades!
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