Gold 1932,21
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EURUSD 1,1782
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DJIA 27599
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OIL.WTI 36,65
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DAX 12906,76
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As we predicted in previous reviews, uncertainty is increasing in financial markets. Donald Trump is once again starting to speak out for China. Now he wants to ban cotton imports from China and put an end to America’s dependence on those products. Additionally the negotiations about Brexit are at an impasse.
GBP/USD
The closer the election, the more passionate it will become. Markets understand that it is difficult to work calmly in such uncertainty, so we saw sell-outs on Tuesday. These were mainly shares of companies in the technology sector, which have grown very well in the last few months. There is a good swing ahead of us, especially in the technology and IT sectors. Against the backdrop of recent events, we should not expect strong growth in the American market.
In Europe, too, things are not easy. The 14.8% drop in GDP in the Eurozone is severely damaging the mood of investors.
The markets are likely to be waiting for the outcome of the September meeting of the European Central Bank, which will be held already this Thursday. The DAX index is losing 1% and is trading at 12980.
Pound Sterling
It seems that the British pound and the UK itself are starting to have serious problems after all. Negotiations are once again at an impasse. Olaf Scholz, the German finance minister, said that London is less and less ready to reach an agreement on Brexit and this will lead to a catastrophic situation. Of course, UK’s exit without a deal will be a very big problem for the country’s economy and for its citizens.
Against this backdrop, the GBP/USD pair has lost almost 1% and is trading at 1.30, which is a strong resistance. Due to the strengthening of the US dollar, further decline in the pair is possible.
Oil
Oil was squeezed into a narrow price range and several key factors did not give a chance for growth. The first was the strengthening US dollar, which put considerable pressure on the price. The second is the second wave of tension between the US and China. The third is the global economy, which is still bubbling after the pandemic and cannot quickly increase demand for black gold.
On Tuesday, WTI oil loses almost 7% and trades at $37 per barrel. So far, only the rapidly dwindling oil reserves in the US stand a chance that the price will try to recover slightly.
What awaits us today?
03.30 Consumer price index in China since the beginning of the year
16.00 Bank of Canada decision on interest rate
22.30 Weekly crude oil reserves in the USA according to the American Petroleum Institute
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