Markets are preparing for a new rally?

By 07/10/2020News
Morning Stock News

Gold  1884,10
(+0,34%)

EURUSD   1,1732
(-0,01%)

DJIA  27740
(+0,17%)

OIL.WTI  39,91
(+0,23%)

DAX   12809,86
(+0,01%)

Donald Trump proved to be a tough guy and was able to get back to work on Monday. The American markets reacted to this news with good growth. After all, the election race continues.

S&P500

S&P500

We can already say that the recovery of the Trump is already included in the price. Tuesday turned out to be multidirectional for the markets. Now, all investors are waiting for a deal to stimulate the economy, which they cannot agree on in Congress. There are rumours that Trump will support this deal because he needs to raise his rating. The likelihood that the stimulus package will be accepted is increasing, which could launch a new rally in the stock market.
Also ahead is the publication of the minutes of the Federal Open Market Committee meeting, which will shed light on the next steps for the US Federal Reserve. Powell’s latest statements express concern over the high unemployment rate.
On Wednesday we will have a speech by Christine Lagarde as well as a press conference by Powell. Investors will be waiting for the announcement and there is likely to be little volatility in the market.


Euro

The EUR/USD pair is already very close to key level 1.1800. The revised Manufacturing Activity Index in Germany, as well as the EU’s more restrained fiscal policy, is supporting the EUR. However, the threat of partial quarantine in some European countries could put serious pressure on the pair.


Pound Sterling

The British pound is still waiting for the outcome of the Brexit negotiations. The first target for the pound will be level 1.3000, after which the path to 1.3200-1.3400 will open. In the short term, this increase may occur due to the further weakening of the US dollar, but the pound will need to be looked at in more detail after the negotiations are completed.


Gold

In terms of gold, the growth prospect remains. The precious metal is well above $1900 per ounce and continues to rise slowly. The American dollar has been cheaper for the seventh day in a row, which also provides quite a strong support for gold.


What awaits us today?

05.00 Export volume in China since the beginning of the year
14.10 C. Lagarde, Chairman of the ECB will make a speech.
20.00 Publication of FOMC protocols
20.00 FOMC statement


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