Wall Street records push Frankfurt forward

By 04/11/2019News
Mobile trading

04.11.2019 – Daily Report. Up, up and away: S&P 500 and Nasdaq 100 set new records. The DAX breaks the 13,000 points in early trading. No wonder, since the positive signals in the China-USA customs dispute are now towering.

German stocks with profits

This is how it works: The DAX once again reached an annual high at the beginning of the week. And it broke an upward gap at the same time. Germany’s leading index recently rose by 1.1 percent to 13,100 points.
On the one hand, the fact that US Secretary of Commerce Wilbur Ross indicated in an interview with Bloomberg that Washington could dispense with punitive tariffs on imported cars was a source of joy. For there had been positive discussions with car manufacturers in the European Union, Japan and Korea. In addition to strong economic data from China and the USA, news about the customs dispute between China and the USA was the main reason for the buying mood of the stock market in Frankfurt.

Only the signature is missing

“We’re making good progress,” American Secretary of Commerce Wilbur Ross said on Sunday. There is indeed “no reasonable reason” why ‘Phase 1 of the trade agreement could not be concluded this month, Ross said in an interview with Bloomberg TV. In addition, there could soon be licenses for all American companies that wanted to sell components to Huawei.
In addition, US President Donald Trump’s economic advisor Larry Kudlow said earlier that several chapters – on agricultural products, financial services and currency issues – were “practically ready”. Elsewhere, there has been great progress. US President Donald Trump also said on Saturday that Phase 1 could be signed in Iowa.
There remains a small detail that is quickly forgotten: the signature is still missing. Should there be a bitter disappointment here, then the prices will most likely rattle downwards. There is also the possibility that the market will act according to the motto “buy the rumor, sell the fact”. If you trade CFD or online stocks, you should therefore always check for regular market updates and at least consider a short position – regardless of whether you are successful or unsuccessful in the customs dispute.

Opportunity with Renminbi

All this leads to an interesting aspect in the foreign exchange market. The South China Morning Post reported that there is another fact pointing to an agreement. China wants to stabilize the yuan to support the conclusion of a trade deal. Specifically, the People’s Bank of China (PBOC) announced on Friday that it will offer Yuan-denominated assets with a total value of 30 billion Yuan (about 4.3 billion Dollar) this Thursday in Hong Kong. This is a way to push up lending costs, making it more difficult for speculators to bet on a falling currency. In addition, the yuan is sucking out of the market. Specifically, the auction is to offer 3-month securities worth 20 billion yuan and one-year-olds over 10 billion yuan.

China shares want to go up

In the light of the news, investors in China got in. The CSI-300 rose by 0.7 percent to 3,978 positions. In addition, China’s industry grew as strongly in October as it did two years ago. Meanwhile, Japan did not trade because of Culture Day.

Records in New York

There were also happy customers from the USA on Friday: The US labour market did not lose as much momentum as feared with 128,000 new jobs created in October. The unemployment rate remains close to its 50-year low.
Investors in New York therefore took action. The S&P 500 climbed by 1.0 percent to an all-time high of 3,066 points. The high-tech index Nasdaq 100 also rose by around 1 percent to a record 8,161 points. The Dow Jones Industrial rose by 1.1 percent to 27,347 points. The Dow is thus only a few points short of its record high of 27,399 last July.

Public impeachment hearing at last

What remains is a factlet from politics: yes, the Democrats have finally launched the official impeachment hearings on a vote. And finally they should take place in public and not behind closed doors. But no, the Dems don’t agree – two Democrats voted against. Only one ex-Republican and now Independent voted for it. The Republicans voted unanimously against. That looks like a tiny crack in the Democratic front.

That brings the day

The diary brings only a few interesting events, the overview can be found as always here: Market Mover
First, the ECB Monthly Bulletin is due at 3:45pm for October.
At 4pm orders for US industry will follow for September.
The Bernstein Bank wishes you successful trades!

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