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Stocks remain near record highs as GBP looks to recover

Summary:

  • US stock markets and the DE30 trade close to all-time highs
  • GBP attempts to recover recent declines
  • Turkish Lira sinks on US-Turkey clash
  • Bitcoin rises to 1-month high

 The remarkable rally seen in US stock markets continues to show little signs of ending, with the US100 rising further today to post its own all-time high. The US500 and US30 are both within striking distance of their record peaks which were only set just last week. When markets are making, or close to making, new all-time highs there is little by the way of technical analysis to suggest a pullback. Some metrics will show the market to be overbought, but by definition all three remain firmly in uptrends. 

 As a result, all European equity markets have started the new week slightly higher while the DE30 may be poised to register its new all-time record. On top of that, the Spanish SPA35 soared over 1% at the opening following myriad protests which took place on the streets of Barcelona on Sunday.

The pound is the best performer of all amongst the G10 currencies today, as the next round of UK-EU Brexit negotiations begins. Supportive of the pound is a rise in labour-cost pressures, which according to recent data is increasing faster than the Bank of England anticipated. The Office for National Statistics said earlier today that annual growth in unit labour costs was 2.4% in the second quarter - a marked increase on the 1.6% published last week after an error was found in the data. 

The Turkish lira has weakened against the US dollar the most since the beginning of this year following a diplomatic spat between Turkey and the United States as both countries have chosen to suspend their non-immigration visa services, the move which could afflict those who are looking to visit the other country. The moves from both sides followed the arrest of a Turkish national who works at the US consulate in Istanbul for alleged involvement in the July 2016 coup attempt against President Recep Erdogan.

Chinese traders have already come back to work after the Golden Week and their comeback coincides with a rebound seen in Bitcoin (+5.9% at the time of writing). Notice that the price rose during the weekend breaking finally a key resistance line at $4400. Taking a look at the current technical view one could assume that a possible pullback towards a green area would be a decent buying opportunity given strong momentum of an uptrend. A technical overview of cryptocurrencies can be found here

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