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XTB TRADEBEAT

US stocks edge higher but Europe takes a pause 

Summary:

  • US indices move higher at the start of the week
  • European markets trade lower as carmakers weigh on DE30
  • UK100 near all-time high
  • Gold price little changed as USD pulls back 
  • Crypto mixed as Zimbabwe central bank declares ban 

US indices have added to their recent gains during today’s European session, with the US500 moving above last week’s high. The market gapped higher after the weekend, possibly due to a sympathetic approach taken by Trump on ZTE a Chinese firm, which some believe is a sign of a softening of trade tensions. The gap from 2726.5 remains unfilled on the European cash close.  

This side of the Atlantic, it’s not been such a positive day with small losses seen in most the major bourses. Taking a look at the DE30 (DAX futures underlying) daily chart one can see that the German benchmark has fallen back below the 13000 level with carmakers weighing on price. Volkswagen (VOW.DE) is the biggest underperformer among the DAX index components.

A technical overview of the DE30 can be found here

The rally in the FTSE (UK100 on xStation) over the past 7 weeks has been pretty incredible with the benchmark enjoying a strong, clean move higher to trade within striking distance of its all-time high. The gains in excess of 12% over the period have been all the more impressive considering the lack of any real pullback. There have been just 8 red candles out of the 33 closed ones since the market made a low of 6847 back in March, although price is slightly lower today at the time of writing. 

It’s been a fairly quite day for precious metals with Gold and Silver showing some small losses. It can be interesting to look at inter-market correlations when viewing Gold in particular with the US Dollar a key driver.  The latest bounce in the US currency has led to a lowering of net longs in the gold market, and even as they seem to have still some scope to decrease the current level (approximately) tended to offer a decent buying opportunity in the past.

It’s been also a pretty quiet day for crypto markets with no large moves seen. The past week proved to be a weak one for cryptocurrency traders as major digital coins lost ground. Over the weekend we witnessed a shy try to bounce back, however, it fizzled out. In terms of the latest news the Zimbabwean story seems to deserves particular attention after an unprecedented step taken by the country’s central bank

 

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