1. Markets Continue to Push Higher on Trade Optimism
Global bourses continued on a bullish bias last week as investors continued to harbour hopes of a US/China Phase 1 deal. Last week saw all 3 major US indices reach all-time highs and news over the weekend further encouraged hopes that a U.S./China Phase 1 trade deal is just around the corner. Specifically, Chinese Vice Premier Liu had a phone call Saturday morning with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer regarding a “phase-one” trade deal. News of big US banks that went on “risk-on” mode last week further pushed markets higher and presently it is hard to see how much further this bullish bias will continue to prevail.
2. USD Subdued
The USD remains neutral to weak on the risk-on flows and might see further downside this week if this sentiment persists. The EUR is meanwhile hinting to further bullish ambitions, and if it manages to break the 1.11 to the upside, the momentum could get a further push. Also, Lagarde will be on this week for the first time which could bring some changes to the ECB.
3. Oil Prices Edge Higher
In today’s energy markets, crude oil prices traded well above the $57 mark, following steady gains in the previous week. Chances of further upside continue to persist, led on by a stubborn bullish momentum view of global markets. We would expect more direction to come from the much-awaited Saudi Aramco’s IPO which is set to value the oil giant at up to $1.7 trillion.
4. Gold Subdued
Gold prices continued to ease on Monday morning as optimism grew over the US/China “constructive talks” news, while losses were capped by a softer dollar. XAU/USD could drop to the past summer lows this year given the strong risk-on appetite that has consumed the markets.
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Investing Nov 18, 2019 7:33 AM ET
Bloomberg Nov 18, 2019 6:45 AM ET
Reuters Nov 18, 2019 05:58 AM ET
CNBC Nov 18, 2019 08:12 AM ET