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Stocks advance while commodities remain under pressure


  • Global stock markets rallying at the beginning of new week

  • Investors will pay attention to the US data this week

  • Bitcoin is moving closer to $10k mark

With Monday’s economic calendar being almost empty early trading at the beginning of the week has been calm. European stock indices follow their Asian peers posting decent gains across the board. AUD and NZD are the strongest currencies in the G10 basket while Canadian dollar remains on the back foot. Gold trades significantly lower along with oil.

The European Central Bank chose to drop its easing bias during its last week meeting supporting the shared currency for a while. Simultaneously, the bank revised its inflation path slightly downwards while GDP projections for 2019 and 2020 were left unchanged and the 2018 forecast was upped subtly. Since then the euro has retreated quite appreciably despite some rumours revealed by Reuters late Friday.

A majority of digital currencies are trading sideways at the beginning of the new week. In case of Bitcoin we were offered a bullish engulfing pattern yesterday which could lead to a rebound over the next couple of days. Do notice that the Sunday’s candlestick was able to take the price back above $9,350 - quite an important level to watch from a technical point of view.

Looking at the European politics it is worth to note that in Italy the formerly ruling Democratic Party may play a role of a kingmaker after it underperformed in the recent elections. The two leading fronts, the Five Star Movement and the centre-right coalition, are both said to invite PD to coalition after neither of them managed to win the governing majority.

The beginning of the new week has brought relative strength of the Antipodean currencies as both AUD and NZD are the best performing ones among their major peers. There were no specific reasons standing behind those rises, however, the tariff story could have helped the Aussie to some extent.

The first FOMC meeting with Jerome Powell at the helm is still a week away but this week we’ll get final updates that may fine tune the message. Inflation print is the most relevant on the long list of reports as it will indicate a degree of a pressure on the new chairman to raise rates.



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