ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for November 20, 2019. This is not a trading advice. See details below:
FOREX/BREXIT
The pound lost 0.25% of its value to the dollar during early Wednesday trading. This price action follows last night’s televised debate between Boris Johnson and Jeremy Corbyn, as well as lowered expectations on the US and China resolving their trade dispute.
The debate between the leaders of the two main UK parties proved inconclusive, cooling down the market’s anticipation of a swift post-election Brexit resolution. But sterling is also under pressure from events happening elsewhere. The US Senate approved bills seeking the protection of human rights in Hong Kong in a move likely to increase tensions between the two countries and hinder the progress of the ongoing trade talks.
As a result, risk related assets, like the pound and the euro, are suffering losses, while the Japanese Yen, traditionally seen as a safe-haven, is up 0.27% and 0.35% respectively against the single currency and sterling.
Ricardo Evangelista – Senior Analyst, ActivTrades
EUROPEAN SHARES
The global trading wind changed direction on Wednesday with benchmarks across the world drifting lower. This shift in investor’s trading stance was caused by the US Senate passing legislation supporting protesters in Hong Kong. While many were waiting for words from Washington on the issue, investors didn’t really welcome the “Hong Kong Bill” as it is now seen as an interference from the US. Most investors now fear it could significantly impair negotiations and the signing of a “phase one” deal with Beijing, especially after China’s Foreign Minister condemned the US Senate’s actions.
In the meantime, the editor of China Global Time tweeted that only a few people in China believe a trade deal can be achieved soon and that Beijing is bracing for a worst case scenario – a prolonged trade war. Shares of banks and oil companies led declines in Europe this morning with the Stoxx-50 index breaking its major short-term support above 3,680pts and is now sinking towards 3,640pts.
Investors were disappointed by US retail data yesterday but will be cautious as the release of the minutes of the FOMC Minutes release could spark short-term volatility as well as provide more clues on where the US economy is heading.
Pierre Veyret– Technical analyst, ActivTrades