The latest Chinese trade data releases pointed to further weakening in the economy, causing a rather mixed session for Asian markets and a slightly bearish tone in global bourses today. Specifica\lly, the producer prices in China overnight showed a negative picture, which in turn increases concerns of deflationary developments globally and thus increase the relevance and impact of the central bank decisions ahead from the ECB and the FED. One year ago, markets were around the same present levels and then went into steep losses when the central bank stimulus was off the table, draining the markets for the entire year. From my point of view, this increases the stress on the system in general at the present moment.
EU Indices Edge Lower
European bourses started the day lower on Tuesday morning after U.K. Prime Minister Boris Johnson lost a second bid to hold an early election but reiterated his pledge to leave the EU on October 31. It looks like the no-deal Brexit could be averted now as Boris seems to be left with no other choice but to ask for another extension, despite his current protests.
Germany Considers Shadow Budget
Germany hinted it may free a shadow budget which helped to keep the Dax afloat but could pressure the EUR as it would be an additional supply of EUR, especially if the ECB turns to dovish measures on top of that. The shadow budget will enable Germany to boost public investment beyond the restrictions of constitutional debt rules.
Forex Preview: GBP Wobbles
The GBP recovered early Tuesday on the [URL deleted] news that a no-deal Brexit could be averted but later slumped on some rather weak unemployment change data. The USD is trading flat today ahead of the important central bank meetings while the EUR could see further pressure downwards with Germany and [URL deleted] ECB measures ahead.
Oil Prices
Oil futures hit a six-week high on Tuesday, rising for a fifth day on optimism that OPEC and other countries may agree to extend production cuts in a bid to support prices. The new Saudi energy minister, Prince Abdulaziz bin Salman, also confirmed expectations that there would be no radical change in his country's oil policy. However the current rise is based mostly on speculation that Saudi Arabia will increase its efforts to push the price up for their Aramco IPO, so we could see a very rapid change in sentiment on any unexpected developments.
Gold Dips Below $1500, BTC Above $10K
Spot gold has dipped below the $1500 level and is trading at the next immediate support around $1,490 which confluences with the 38 Day MA, and if that level breaks, XAU/USD may get even closer to the $1,400 level. If however, the risk-off tone comes back, which I personally expect to happen sooner than later, gold could experience a turnaround back to above $1,500 levels. I would expect the same reaction for other safe-haven commodities such as Silver. Elsewhere, BTC kept the support at 10k yesterday but has no bullish momentum whatsoever, which could mean another re-test of the 10k level.
Watch the video here:
EU Indices Edge Lower
European bourses started the day lower on Tuesday morning after U.K. Prime Minister Boris Johnson lost a second bid to hold an early election but reiterated his pledge to leave the EU on October 31. It looks like the no-deal Brexit could be averted now as Boris seems to be left with no other choice but to ask for another extension, despite his current protests.
Germany Considers Shadow Budget
Germany hinted it may free a shadow budget which helped to keep the Dax afloat but could pressure the EUR as it would be an additional supply of EUR, especially if the ECB turns to dovish measures on top of that. The shadow budget will enable Germany to boost public investment beyond the restrictions of constitutional debt rules.
Forex Preview: GBP Wobbles
The GBP recovered early Tuesday on the [URL deleted] news that a no-deal Brexit could be averted but later slumped on some rather weak unemployment change data. The USD is trading flat today ahead of the important central bank meetings while the EUR could see further pressure downwards with Germany and [URL deleted] ECB measures ahead.
Oil Prices
Oil futures hit a six-week high on Tuesday, rising for a fifth day on optimism that OPEC and other countries may agree to extend production cuts in a bid to support prices. The new Saudi energy minister, Prince Abdulaziz bin Salman, also confirmed expectations that there would be no radical change in his country's oil policy. However the current rise is based mostly on speculation that Saudi Arabia will increase its efforts to push the price up for their Aramco IPO, so we could see a very rapid change in sentiment on any unexpected developments.
Gold Dips Below $1500, BTC Above $10K
Spot gold has dipped below the $1500 level and is trading at the next immediate support around $1,490 which confluences with the 38 Day MA, and if that level breaks, XAU/USD may get even closer to the $1,400 level. If however, the risk-off tone comes back, which I personally expect to happen sooner than later, gold could experience a turnaround back to above $1,500 levels. I would expect the same reaction for other safe-haven commodities such as Silver. Elsewhere, BTC kept the support at 10k yesterday but has no bullish momentum whatsoever, which could mean another re-test of the 10k level.
Watch the video here:
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