FOREX
The US dollar is starting the week as it closed on Friday, losing ground to other major currencies. Friday’s jobs report showed a more pronounced slowdown in the American labour market than expected by most analysts. The disappointing number of new jobs created during October came after Jerome Powell took a clearly dovish stance at last week’s Fed meeting, in a sequence of events that may signal the end of the Fed’s hiking cycle. Against this background, there may be scope for further dollar softness as traders’ price-in the readjustment in expectations.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Shares fluctuated in Europe on Monday, and price action remained hesitant as investors looked for direction following last week’s solid rally.
Most benchmarks traded sideways this morning, with losses from real estate, utilities and healthcare offset by gains in industrials, tech and energy shares.
The energy sector was, in fact, the top mover this morning after a confirmation from both Russia and Saudi Arabia that they will stick to their oil supply curbs provided another boost to the bullish momentum.
More broadly, stock markets remain consolidated, holding gains driven by a key shift in monetary expectations last week, especially after the latest US NFP report showed a less resilient economy.
Investors are clearly anticipating a peak in monetary policies in the US and the Eurozone, and this is driving market sentiment higher.
However, these are only dovish bets so far, and they will have to be confirmed soon to keep the rally alive and lead stock prices further up, especially after the latest batch of mixed corporate results didn’t provide investors with good reasons to stay exposed to riskier assets.
On the technical side, the market consolidates between 4,165.0pts and the 4,180.0/4,190.0pts zone (38.2% daily Fibonacci). The DMI indicator still shows strong bullish pressure inside a directional price action, while the stable price action in bond yields and the EUR currency don’t provide a threatening set-up for stocks so far.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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