Tuesday was quiet enough compared to the rally on Monday. Markets were evaluating the statements of the key leaders and once again observed dramatic monologues of the US and Chinese leaders.
John Powell addressed the Senate Commission and explained what actions the Fed could take to restore the economy. He assured that the system has many different mechanisms for influence and is ready to apply them. However, there are still disagreements between the Fed and Trump that are slowing down the pace of action. The S&P500 traded mixed, and came close to the SMA200, which, not surprisingly, is at 3000. It’s a very difficult level to take. DAX grew by 0.15% and closed at 11075.
It’s another good day for the Euro. The ZEW index on economic expectations came out much better than last month. Investors believe in the rebound of the German economy as well as of the entire Eurozone economy. On hopes that the lockdown in Europe will end, the Euro is trying to reach the level of 1.0960, but it is not working well. Next milestone for Euro 1.10. Psychological level and SMA200 level. Of course, it will be very difficult to pass from the first attempt, so it is possible to predict the correction from this level.
In oil, the bulls prevailed and confidently moved the price of WTI above $30 per barrel. But everybody knows that American shale oil producers can very quickly restart their production, and the price of $30 per barrel can already push them to start producing again. Now investors are closely watching the production level, as the market cannot be called balanced. Probably, we will see enough volatility in oil in the nearest future.
Gold on Tuesday consolidated near its highs and traded at $1743 per ounce. Joint efforts of the Federal Reserve, the Ministry of Finance and major world leaders, which allocate hundreds of billions of euros and trillions of dollars, may help gold hike even higher to $1800 per ounce.
What’s waiting for us today?
08.00 UK consumer price index for April.
16.30 Crude Oil Stocks Change in the USA
20.00 FOMC 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.