Gold 1504,38
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EURUSD 1,1106
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DJIA 26778,50
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OIL.WTI 55,91
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DAX 12872,78
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Thursday brought news that was worse than what experts had predicted – both in the EU and in the US. Leading economies are slowing down, hurdled by the ongoing trading wars. Nevertheless, after the initial slump, the stock market recovered and continued growing.
DAX30 Daily-Chart
Investors are starting to believe that even bad news isn’t so bad for the stock market, after all. This is because negativity strengthens central banks’ intention to keep printing money. And what do people do with this money? That’s right: when interest rates on bonds fall, people use their money to buy stocks.
EURUSD
The situation on the currency market is different. Business activity indices in both EU and Germany continue to fall. It’s becoming more and more obvious that cheap money isn’t helping the economy of the euro zone – and this means that it’s worth buying currency that can at least yield a good positive swap (that is, USD).
GOLD
Understandably, gold buyers took today’s bad news as a signal and started buying the precious metals. The same logic is at play here as with stocks. Central banks must keep printing new money – but there’s nowhere for it to accumulate. In this context, gold broke through the strong resistance line of $1500 per ounce, that held out for the past several days. Technical analysis points to an emerging short-term bullish trend.
INDICES
DAX30 has reached a new year-high. It seems like the Christmas rally is beginning a month earlier than usual this year.
What’s next?
10.00 German Ifo Business Climate Index
16.00 The University of Michigan Consumer Confidence Index
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