Following yesterday's positive news from Trump, the US and Asian stock exchanges ended in positive territory. However, the futures of major European indices point to a weaker, more cautious, opening today. The situation in Hong Kong is still critical, and data from China on industrial production have come out much worse than expected.
Today, we expect cash flows to divert to risky assets because of the improved sentiment surrounding the trade war, but trade with caution precisely for the sake of assimilating Chinese data and the unrest in Hong Kong. In this case, we have a mixed foundation, and it will be crucial today to monitor who will take advantage. It may be difficult to say exactly where "smart money" will go, but investors are definitely focusing more on the trade war.
Today the calendar is relatively busy, and at 9:00 we expect GDP from Germany and industrial production from the Eurozone. Today, we expect Cisco and Macy's reports as well.
Against the background of the prevailing risk appetite, we expect defensive assets such as the franc, yen and gold to fall in price, the US dollar to rise in price and the Australian dollar to take a hit due to weaker data from China. We expect oil to depreciate today due to the larger inventory of oil yesterday, and today we will also have national and Cushing data on oil stocks. Another factor that will suppress oil today is also China's data, because it threatens global growth and the demand for "black gold".
On the Brexit front, a parliamentary spokesman aims to block the no-deal Brexit, with Johnson facing increasing resistance in the face of rebels, Europe and Labor. The latter are still awaiting a no-confidence motion, with October 31 approaching. The UK Parliament is still on vacation. Another thing that can threaten Europe's good mood today is Germany's GDP data. We are coming back to them because yesterday the data was extremely bad, which hit large black clouds over the German economy, which seems to be heading for recession.
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