So the first week of September, which turned out to be multidirectional, ended. The sharp fall in the stock markets on Friday showed that the current situation must be assessed more carefully.
It is already clear that it is time for investors to pay attention to macroeconomic statistics. COVID-19 is receding into the background, although the number of people falling ill is not falling. Definitely the driver of decision-making will be the potential for independent economic growth without incentives. Many investors understand that dust after a pandemic must lie down, only then will it be clear where the entire economy is going. On Friday, the S&P500 index fell by 1.35% . The US labour market is recovering, so the wishes of the US Federal Reserve are beginning to be fulfilled.
There are two months left until the US election, which is a very risky time for financial markets. Most investors are sitting back and thinking about whether or not to fix current positions because they have already taken good profits. Traders can buy back that kind of drawdown, or they can take a waiting position. One thing is clear: with the current monetary policy, such drawdowns will be even greater and the volatility will increase.
On the eve of NFP, many investors are cautious and look out for the growth of the US dollar. The technical picture indicates that the US dollar index is preparing for its reversal. Aggressive US monetary policy is likely to strengthen long-term forecasts for the dollar, but it is already clear that the appetite for risk is beginning to balance the desire to preserve its capital.
The strengthening of the US dollar in the long run may not have very good consequences for risk assets, whose dynamics are directly related to inflation.
The oil market is ambiguous. On the one hand, after the storm in the Gulf of Mexico American companies had to reduce more than half of their oil production at sea. On the other hand, the refinery’s maintenance time is approaching, during which the price per barrel also falls. On Friday, the WTI oil price went below $40 per barrel and is trading at $39.50.
What awaits us today?
05.00 Export volume in China since the beginning of the year
08.00 Volume of industrial production in Germany for July
16.30 UK Housing Price Index from Halifax for August
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