The Asian markets ended mixed, and Europe came. On the last day of the week we expect the good sentiment from yesterday to continue. Futures of key European indices point to a higher opening than yesterday’s closing values and today market participants will have to monitor three important events: the Eurozone finance ministers meeting, US industrial production, and BOE chairman Carney’s statement. Since China’s data was offset for about 10 am Bulgarian time, it will affect the European session more.
We expect the sentiment to remain positive again despite the still cold relationship between the US and China. Markets today also expect to continue the rally against the background of the Fed’s expectation to cut interest rates next month.
Later data on industrial output, depending on their outcome, will only support this thesis or give rise to suspicion among market participants. With regard to the trade war, Trump urges Xi to appear at the G-20 summit at the end of this month, but the Chinese remain cool on such bold speeches. With the approach of the meeting, the markets will begin to appreciate the probability of a deal not, but at least constructive talks between the two sides that give hope.
We expect oil to keep up its stature today given the tensions in the Middle East. Even with commodities, gold is advancing significantly, but traffic remains limited at 1347 levels.
The US dollar seems to hold positions today as we expect it to continue rising and the euro to be depressed. Given the risk-on sentiment, we expect the Japanese yen to remain in the background as well, with investors targeting more risky assets.
Trader Martin Nikolov