Global risk sentiment revived

20 August, 2019

A sense of positivity is sweeping across financial markets on Tuesday amid signs of progress in trade negotiations and hopes of stimulus in major economies.

Asian markets were mixed during early trading after China’s central bank announced a key interest rate reform over the weekend – a move seen supporting economic growth. The mood across European market is set to improve further on rising optimism about stimulus measures in Germany after Finance Minister Olaf Scholz suggested that Berlin could spend up to €50 billion in an economic crisis.

While stimulus hopes and renewed trade optimism are clearly fuelling global equity bulls, the question is for how long?

The explosive movements witnessed across financial markets last week highlight how global sentiment remains fragile and highly sensitive to geopolitical risk factors. Equity bears have enough ammunition to make an unwelcome return should renewed trade tensions and global recession fears rekindle risk aversion.

King Dollar comfortably sits on throne


The mighty Dollar continues to tighten its grip across currency markets as the Dollar Index (DXY) hits a fresh three-week high at 98.40 on Tuesday.

Stimulus hopes is sending investors away from safe haven assets, which is lifting US government bond yields consequently supporting king Dollar.

Where the Dollar concludes this week will be heavily influenced by the FOMC minutes and Chair Jerome Powell's speech in Jackson Hole on Friday. Should the minutes and Powell’s speech confirm expectations of a US interest rate cut in September, the Dollar has the potential to weaken.

In regards to the technical picture, the DXY remains bullish on the daily charts. An intraday breakout above 98.50 should inspire a move higher towards 99.00.

Commodity spotlight – Gold


Gold bulls are engaged in a fierce battle to defend the $1500 psychological level as investors seek riskier assets.

While the improving market mood has the potential to send the precious metal lower in the near term, the medium to longer term outlook remains bullish. Gold is seen finding ample support from a dovish set of Fed minutes and if Powell signals a September interest rate cut during his speech as Jackson Hole.

In regards to the technical picture, Gold is bullish on the daily charts. Should $1500 prove to be a reliable support, prices are seen rebounding towards $1525 and $1550. A breakdown below $1500 opens the doors towards $1485.


Source link  
Dollar index drops after US retail sales contraction

The Dollar index (DXY) immediately fell by some 0.2 percent, dropping below the 98.0 psychological level once more...

Dollar's fall halted at 98.4 support level

The Dollar index (DXY) fell by about 0.38 percent before paring back losses, as the 98.4 support level kicked in. Although the September US inflation...

Dollar paring early October losses

The Dollar index (DXY) continues to pare losses seen earlier this month, as investors await the minutes from the September FOMC meeting...


Gold hammered by resurgent Dollar

Gold tumbled more than $30 on Wednesday, almost breaking below $1500 as political uncertainties in the United States and Brexit...

Time to prepare for 100 in the Dollar Index?

The Greenback is on a tear and the breach above 99 in the Dollar Index makes 100 look very appetizing on the menu. The stunning run of buying...

Time to expect a jump to $60 in WTI Oil?

The breaking development that transpired throughout the weekend, where attacks on Aramco Oil plants in Saudi Arabia could take away up to 5.7...


Risk sentiment brightens

A wave of optimism is sweeping across financial markets with stocks in Asia pushing higher on renewed optimism over a potential breakthrough...

Pound regains mojo on positive GDP

It has not been a bad start to the trading week for Sterling which is standing tall against every single G10 currency as of writing. Mildly encouraging remarks...

Gold finds comfort near six-year high

Everyone wanted to piece of Gold yesterday after US manufacturing activity decelerated in August for the first time in three years...

  


Share it on:   or