FOREX
The US dollar touched a two-and-a-half-month low during early Monday trading, reflecting the consensus amongst market participants that the Fed has reached the end of this hiking cycle. US economic data released over the last weeks showed a slowdown in activity, in a dynamic that culminated with a lower-than-expected inflation reading for October. Investors will now focus on tomorrow’s release of the latest FOMC minutes, which will be closely scrutinised by traders searching for clues indicating when the first rate cut may come. Dovish minutes could trigger some downside risk for the dollar; otherwise, the economic calendar for the week looks relatively uneventful for the greenback.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Shares markets opened mixed in Europe on Monday, holding gains ahead of further macro developments this week.
Market sentiment fluctuated this morning, as losses in Germany due to the sharp price action in Bayer, were offset by gains in Paris and Madrid.
Even if equities started the week without direction, risk appetite remains high from investors as the dovish narrative started two weeks ago remains in place.
Traders and investors are now focused on the release of the FOMC and ECB minutes of their last meetings, while speeches from many central bank officials, including ECB President Christine Lagarde and BoE Governor Andrew Bailey, also loom this week.
Elsewhere, geopolitical tensions remain an uncertainty driver for equity traders, especially after a vessel was seized by Houthi rebels in the Red Sea.
This raised concerns of an energy supply disruption, which drove the sharp price action in the energy sector this morning.
On the technical front, the STOXX-50 index still trades above the 4,330.0pts level despite an ongoing bearish divergence between prices and the RSI indicator, highlighting a rally slowdown. The break-out of the newly established support level could open the doors to a correction towards 4,300.0pts and even deeper.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk.