We are in for another volatile week as markets turn lower with investors focusing on simmering tensions in the Middle East and disappointing developments on the trade war front.
EU Markets Lower
In Europe, Germany’s Manufacturing PMI disappointed this morning coming in at 41.4 versus the 44.0 market consensus sending the DAX lower. Meanwhile, Thomas Cook's sudden bankruptcy on Sunday also weighed on EU markets and specifically the FTSE 100. The 178-year-old British tour operator collapsed last night, stranding hundreds of thousands of travellers with the company stating that it would take steps to enter into compulsory liquidation with immediate effect.
Key Data Ahead:
We have some important data to look forward to this week with key numbers from the EU and the U.S. as well as an RBNZ Interest Rate Decision which could lead to further bearish trends in the Kiwi. Recent developments did rather call for a bearish move in the currency and a with broken support level against the USD, a dovish RBNZ would lead to another round of selloff very soon.
Market participants will also be monitoring a climate change meeting and the impact on the economy and global warming. No specific conclusions are likely to follow but we may have more guidance for the markets. The collapse of Thomas Cook and the big debt shows how fragile stock markets are and how they can possibly react: we might see some bearish move at some point, especially with the rise of safe-havens such as spot gold.
Oil Prices Rally
Elsewhere, oil prices gained more than 1% to hit their highest levels in two sessions early this morning as Middle East tensions remained elevated, supporting prices. Specifically, the Pentagon ordered additional troops to be deployed in the Gulf region to strengthen Saudi Arabia’s defences following the Iranian attack on Saudi oil facilities.
Forex Preview: Safe-Havens Set to Rise
We may see a turn to safe havens today with the JPY to possibly rise higher on the new wave of risk-off to come. The EUR tumbled against its rivals today as the latest German manufacturing figures disappointed. The common currency lost 0.7% against the TRY and 0.5% against the NZD as of 7:40 GMT this morning. It should be noted that the GBP is also losing traction as the Supreme Court rules on whether Boris Johnson has misled the queen in helping him suspend Parliament for a month. If the ruling is against Mr.Boris, we would expect the GBP to plummet to new lows while the EUR would climb higher.
Gold Remains Supported Amid Risk-Off
XAU/USD remained well above the $1500 level yet traded flat as a fresh wave of risk-off began to form in the markets. Investors are waiting for clearer direction especially when it comes to the U.S.-China trade talks while escalating tensions in the Middle East continue to provide support for the safe-haven metal.
Watch the video here:
EU Markets Lower
In Europe, Germany’s Manufacturing PMI disappointed this morning coming in at 41.4 versus the 44.0 market consensus sending the DAX lower. Meanwhile, Thomas Cook's sudden bankruptcy on Sunday also weighed on EU markets and specifically the FTSE 100. The 178-year-old British tour operator collapsed last night, stranding hundreds of thousands of travellers with the company stating that it would take steps to enter into compulsory liquidation with immediate effect.
Key Data Ahead:
We have some important data to look forward to this week with key numbers from the EU and the U.S. as well as an RBNZ Interest Rate Decision which could lead to further bearish trends in the Kiwi. Recent developments did rather call for a bearish move in the currency and a with broken support level against the USD, a dovish RBNZ would lead to another round of selloff very soon.
Market participants will also be monitoring a climate change meeting and the impact on the economy and global warming. No specific conclusions are likely to follow but we may have more guidance for the markets. The collapse of Thomas Cook and the big debt shows how fragile stock markets are and how they can possibly react: we might see some bearish move at some point, especially with the rise of safe-havens such as spot gold.
Oil Prices Rally
Elsewhere, oil prices gained more than 1% to hit their highest levels in two sessions early this morning as Middle East tensions remained elevated, supporting prices. Specifically, the Pentagon ordered additional troops to be deployed in the Gulf region to strengthen Saudi Arabia’s defences following the Iranian attack on Saudi oil facilities.
Forex Preview: Safe-Havens Set to Rise
We may see a turn to safe havens today with the JPY to possibly rise higher on the new wave of risk-off to come. The EUR tumbled against its rivals today as the latest German manufacturing figures disappointed. The common currency lost 0.7% against the TRY and 0.5% against the NZD as of 7:40 GMT this morning. It should be noted that the GBP is also losing traction as the Supreme Court rules on whether Boris Johnson has misled the queen in helping him suspend Parliament for a month. If the ruling is against Mr.Boris, we would expect the GBP to plummet to new lows while the EUR would climb higher.
Gold Remains Supported Amid Risk-Off
XAU/USD remained well above the $1500 level yet traded flat as a fresh wave of risk-off began to form in the markets. Investors are waiting for clearer direction especially when it comes to the U.S.-China trade talks while escalating tensions in the Middle East continue to provide support for the safe-haven metal.
Watch the video here:
