ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for August 28, 2019. See details below:
FOREX
The Pound is once again on the backfoot, both against the Euro and the Dollar. This follows yesterday’s recovery, on the back of news that opposition leaders had agreed on a strategy, to prevent a no-deal Brexit. The markets regard no deal as the worst possible outcome for the British economy and news that there will be a cross party effort to counter Prime Minister Johnson’s plans to leave on the 31st of October no matter what, were enough to fuel Sterling gains of nearly 0.5% to the Dollar. However, these gains have been completely cancelled during early Wednesday trading, as reports emerge that Boris Johnson will ask the Queen to suspend parliament from mid-September until mid-October; a move seen as a way to ensure his plans of a no-deal Brexit are executed, without interference from MPs opposed to such an outcome.
Ricardo Evangelista – Senior Analyst, ActivTrades
OIL
The impressive draw in crude oil inventories estimated by the American Petroleum Institute (API) has given a lift to the price of the barrel, with WTI jumping from $54 to $55,5. Prices could have space for further growth, up to $56,5, where the next resistance area is placed. The general scenario of uncertainty, with the trade war proving to be a long game and fears of a recession (or at least of a slow-down of economic growth) just behind the corner. All these elements are not supportive for the barrel. Vice versa, it seems likely that oil price would get a lift in case central banks confirm their dovish tone and turn it into action in order to sustain the economy and, indirectly, oil demand.
Carlo Alberto De Casa – Chief Analyst, ActivTrades
EUROPEAN SHARES
European equities slipped shortly after the opening bell today, following a mixed trading session in Asia. Investors sentiment is becoming more and more difficult to sustain as optimism towards a positive outcome of the U.S.-China trade dispute is fading. Investors brace for the worst as the deadline for the next round of tariff from both bloc is getting closer and closer (September 1st). While President Trump’s frequent attacks towards the FED raises more and more concerns for some investors, China seems to be ready to play a long game with the U.S., possibly betting on a change of the stance of the administrations with the 2020 Presidential election looming in Washington. In Europe, there is a little more optimism over the options for Brexit after the U.K. Government is said to be ready to restart talks with the EU as it sees room for a deal negotiation.
The FTSE-100 index is trading higher, moving towards 7,100.0pts after a solid rebound registered over the 7,040.0 price level. A clearing of the 7,100.0 level could lead the market up to 7,120.0pts and 7,145.0pts by extension on a very short-term basis if the current optimistic mood persists. In Europe, Tech shares and Insurers are leading the decline as the Stoxx-50 index went back to the 3,350.0pts support zone. A deeper corrective move may drive the market to 3,330.0pts whereas a rebound over 3,350.0pts will be likely to send the market higher, towards 3,380.0pts.
FTSE100 index
Pierre Veyret– Technical analyst, ActivTrades