The demand for safe haven assets is declining, as the US stock market that was doomed to collapse remained stable. Investors are ready to jump on with the first signs of a selloff in the US stocks, but they need to wait until the next trading session: the S&P 500 added 0.19%, Dow 30 industrial index slid 0.03% after a 1% drop in the earlier session, thus halting bears attempts to take up the sway. The focus remains on the US health care bill – an alternative to Obamacare, which marked the clash between Trump and Congress. Its failure can pose a threat to the implementation of the fiscal and tax plans of the president, which is now expressed in the US currency pullback to the pre-election levels. The voting in the House of Representatives is scheduled for today and investors will probably continue to quit the US dollar, as doubts about the potential of the executive power of the president prevail in market sentiments.
The fall in European stock market may continue to gain momentum, a three-day decline in major European stock indexes – Euro Stoxx 50, DAX, CAC 40 – was the result of the strengthening of the European currency and flight from risky assets amid growing uncertainty. In the event that the defensive assets resume their growth, this may signal that the profit-taking trades are coming to the forefront.
Gold made up for losses, Yen retreats after strengthening to 110.75 against the dollar, the bearish trend persists. Oil prices are trying to get out of the series of negative sessions, as investors remain hopeful of further reduction in production by OPEC countries and its partners since the retreat of the cartel from the current strategy will at least look strange. The increase in production in the US has become a predictable reaction to the efforts of Saudi Arabia to restore the balance of supply and demand in the market and now the cartel can only continue to go against the backdrop of the American Oil industry.