- US indices at fresh all-time highs as market falls into complacency again
- US dollar gains, investors hope for a strong NFP report
- Oil crashes for the second day
After a massive recovery yesterday, markets fell into complacency today, clearly assuming that all geopolitical tensions were over. Indeed there was no major escalation in the Middle East and while one cannot be sure what’s next as relations are tense, investors just moved on. However, judging by the moves it looks nearly as if all what’s happened was risk positive with key indices higher than before the Soleimani death. Adding to this sentiment were rumors that the Phase One deal will be signed next week in Washington. However, the Chinese delegation will be led by vice-prime minister and president Xi will not sign the document itself. Does that decrease the significance? It’s hard to tell now, investors clearly are not concerned. All the major US indices (US500, US100, US30) have soared to their all-time highs today.
Regardless of what people think about this practice, Donald Trump leaves little doubt about his election strategy in terms of markets. Source: twitter
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Open account Try demo Download mobile app Download mobile appWhile the German DE30 lagged the US in December, it has entered the party mode too. The index is over 500 points higher from yesterday’s open. The data from Germany did not stand in the way even though it showed annual decline in orders, output and exports (with the trade data being especially gloomy). DE30 is less than 1% shy off it’s all time high from January 2018.
Meanwhile, the US dollar has gained for the second day as traders brace for a strong NFP report (due tomorrow, 1:30pm GMT). This will be the biggest release this week and it could be a make-or-break for the greenback as the EURUSD is back at 1.11.
Strong risk sentiment traditionally lifts oil but it’s not the case now as worries about Middle East escalation fade. OIL and OIL.WTI are literally crashing for the second day. Gold and silver are down as well although gold is trying to consolidate around $1550.
A perception of Middle East de-escalation has really been a massive hit for OIL.WTI. Bulls are now trying to at least defend the $59 support zone. Source: xStation5
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