On Wednesday, the stock market correction continued. Investors are still analysing the possible outcomes of the US-China trade talks, with a deal expected soon. As positive business activity data is reported in the US, a further relaxation of the monetary policy is becoming less probable. The markets are waiting for something new to spur them on.
USD index daily chart
The things are looking better in the cryptocurrency market. Starting from January 1, 2020, China will relinquish its harsh policy against crypto mining. The global market cap has grown by 2.8% to $253 billion. In the absence of important crypto news, traders are mostly busy speculating with their assets.
Tuesday lacked significant news and economic reports, and euro was trading at 1.1070. Investors are disconcerted by the latest statement by Christine Lagarde, who could follow in the steps of Mario Draghi and lower the interest rate to a negative value. The correction that began two days ago has been expected for a while. Now, everything will depend on the European economical data and on the news of the US-China trade talks.
Gold is trading within a narrow channel. The price now mostly depends on the outcome of the China-US negotiations. If a deal is indeed signed soon, the trade war will end, and the demand for risky assets will grow. Gold is a “safe haven” asset, so its price may undergo a correction.
Global markets are poised in expectation. A lack of global news or economical data gives investors a chance to take a breath and consider their options. European exchanges are waiting for a decision on Brexit; those in the US are expecting a trade deal with China. Many investors will likely choose to take profit and wait for more news before they take their next step.
11.00 ECB monthly report
14.00 Bank of England’s inflation report
14.00 UK interest rate update
Important Notes on This Publication:
The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.