Markets are very overheated

By 12/06/2020News
Morning Stock News

Gold   1693,50

EURUSD   1,0799
( -4,37%)

DJIA  24115

OIL.WTI  25,095

DAX   10609

Most markets are starting to move. It is difficult to say where the markets have gone so far, but apparently not all is so good in the economy. Although there were no sharp statements from the U.S. Federal Reserve, investors still decided to reinsure themselves and fix profits.



For two consecutive days, Wednesday and Thursday, the markets are in a free fall. Interestingly, almost all sectors of the economy, from technology to healthcare, are falling. Donald Trump is angry at Powell’s statements about the decisions that the Fed is making. Perhaps now begins a certain period of correction, which reflects the real state of the economy. Things are not good in Europe either. Against the backdrop of protests about racial discrimination, some companies are suspending their operations. DAX is falling almost 4.5% on Thursday, S&P500 is trading at 3038, 4.7% below opening.


The US dollar is strengthening on Thursday as investors preferred exit from risk assets. For the EUR, there are also some risks for the upcoming European Council, which will be held next week. The pair EUR/USD, which has reached such heights since March, may well adjust to the level of 1.12, if the recovery measures for the EU economy are questionable.


Exporters and oil market participants are still trying to determine the consequences of the coronavirus pandemic. Although the demand for oil is increasing slightly, it still remains depressed. One glad thing is that OPEC+ has decided to reduce production. It will definitely affect the oil rate, but in the short term. WTI oil falls 8% on Thursday and trades at $36.4 per barrel.


The gold has performed very well in a few weeks. On Thursday, trading at $1730 per ounce, the gold showed that it will strengthen as soon as investors withdraw from risky assets. There is potential for growth, given that the world, and the U.S. in particular, is afraid of a second wave of infection with COVID-19. The gold may reach the resistance levels of $1750 per ounce at any moment and try to break through it.

What’s waiting for us today?

08.00 UK GDP.
11.00 Volume of industrial production in the European Union for April.
16.00 US consumer sentiment index

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