Today is the day of truth for the stock markets. Despite the optimistic sentiment, traders remain in thorns as earlier today the two largest economies in the world are expected to sign Phase One of the trade agreement with each other.
I expect European stock indices to start the session with decreases, with recent negative tariff news weighing on sentiment.
Banking stocks remain the most popular today, and they are the first to publish their quarterly reports and to act as a barometer for the internal health of the economy.
The indices are close to their record highs and the fragile balance of risk-on sentiment remains at risk.
Gold stays in short-term chips, as if in a stand-by catalyst to steer cash flows in either direction.
The lack of major macro-day-to-day relations suggests that the focus will be on the reports and the upcoming Washington meeting between the US and Chinese ambassadors.
Oil is also continuing its slow decline, although it is on a lot of supports and indicators are already starting to glow to resume the mid-term uptrend.
The Playbook of the day indicates that we remain vigilant and any pleasant surprise on any front will direct smart money to risky assets.
Let’s not forget how closely Trump has been watching the stock markets and he will certainly want the bullish movement to continue as it is.
Trader Aleksandar Kumanov