17.09.2019 – Daily report. It hasn’t been as bad as expected so far: No war in the Persian Gulf, relatively moderate tones from Washington and Riyadh, the oil price is not shooting up any further. Nevertheless, investors in global trading remain cautious. And for good reason: We may experience the calm before the storm on the stock market and in the oil market.
Caution in Frankfurt
First of all, wait and see: On Tuesday noon, the DAX was down by 0.1 percent to 12,366 points. After eight winning days in a row, the Frankfurt Stock Exchange had again booked a setback on Monday, but only a small one. In view of the air strike on the Saudi oil industry, this is astonishing, just like the so far restrained reactions of Saudi Arabia and the USA.
US President Donald Trump said he did not want war; the Saudis did not hold the mullahs in Tehran directly responsible for the attack on Abqaiq. But nobody believes that the Huthi rebels in Yemen should be able to carry out such a professional attack. Ergo: Not all days are evening yet, the danger of war is by no means averted. So always keep an eye on regular market updates and direct market access open.
Moderately positive ZEW data
Meanwhile, the Frankfurt Stock Exchange ticked off new data from the ZEW with a shrug of the shoulders. The medium-term economic expectations of financial analysts and institutional investors were better in September: The index rose from -44.1 points in August to -22.5 points. However, the indicator of the Centre for European Economic Research in Mannheim remains well below its long-term average of 21.5 points.
Scepticism in Asia
There was some relief on another front: Trump told Congress that the US and Japan were ready to sign a trade deal. And the Chinese state television CCTV reported that a Chinese delegation would arrive in Washington this week to prepare for negotiations at the highest level in October. Deputy Finance Minister Liao Min also flew to the USA, the invitation had come from Washington. The CSI-300 nevertheless dropped by 1.7 percent to 3,891 points. After the long weekend, the Nikkei recorded only a plus of 0.1 percent to 22,001 points.
New York is waiting
In the USA, doubts about the Federal Reserve’s expected rate cut were growing. An average of 25 basis points is considered to have been agreed by most brokers. However, Fed Chairman Jerome Powell may feel compelled to prove his independence in the face of Trump’s repeated pushing. The Dow Jones index lost 0.5 percent yesterday to 27,076 points. The S&P 500 lost 0.3 percent to 2,997 points. And the Nasdaq Composite also lost 0.3 percent to 8,153 points.
This is what the day brings
In addition to the smouldering conflict in the Persian Gulf, a few economic data items are coming to the fore. As always, you will find an overview here: Market Mover
At 2:30pm US data on industrial production in August will be available on the ticker.
This is followed by the NAHB housing market index at 4pm.
Traders in the Forex market should also carefully scan the news regarding the British Pound and Brexit: The highest British court deals with the forced break of the parliament. Should this be overturned, we are threatened with new hustle and bustle in the House of Commons. Oooorder!
The Bernstein Bank wishes you successful trades!
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