ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for October 22, 2019. See details below:
FOREX/BREXIT
The pound is testing the $1.30 level on the morning of yet another potentially decisive day for the Brexit process, as Prime Minister Boris Johnson tries to get parliamentary approval for his withdrawal bill and timetable in time for the October 31st deadline. Should he succeed, the pound is likely to continue to rise and few will be surprised if it reaches $1.35, as the markets will at this stage see a negotiated exit from the EU, with a transition period, as the best possible outcome.
On the other hand, if the forces opposing the government’s plans succeed, sterling is likely to retrace some of the recent gains, as uncertainty over the outcome of the process will once again make the pound unattractive to Brexit-fatigued investors.
Ricardo Evangelista – Senior Analyst, ActivTrades
EUROPEAN SHARES
Stock markets opened with no clear direction on Tuesday as most benchmarks remain in their consolidation phase following last week’s gains. Market sentiment is still bullish, especially after China Vice Premier Liu He confirmed progress was made during the last trade discussion with the US and that there was a good chance of reaching an agreement during November’s meeting in Chile.
On the US side, Donald Trump also confirmed the positive signs and said he was hopeful of an agreement in November, which represents a strong bullish leverage to stocks. With risks related to the trade war fading away, investors have switched their focus back to data and especially to corporate earnings which will provide them with more clues on how companies have dealt with the negative impacts of the US-China trade disputes in Q3.
The current earning season shows good results so far, which indicates there may be enough space for an extended rally on stocks before Christmas if the current risk-on trading stance continues.
Pierre Veyret– Technical analyst, ActivTrades