FOREX
The US dollar hedged down in relation to other major currencies during early Monday trading, but not significantly. With reduced liquidity in the markets due to the US Labor Day holiday, investors from the rest of the world are still processing the meaning of the latest employment figures from the US, which were published on Friday. The number of new jobs created in August was better than expected, albeit lower than in previous months. At the same time, average earnings grew less than expected, and unemployment just overshot expectations. Against this background, the goldilocks scenario of a soft landing envisaged by Jerome Powell’s Fed, with inflation decreasing and the economy slowing but not entering a recession, appears increasingly achievable. If confirmed, this dynamic is likely to support further dollar gains as economies elsewhere are struggling to grow.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Share markets advanced in Europe on Monday, extending the bullish trend started in Asia overnight, as stimulus measures and dovish bets bolstered sentiment.
All European benchmarks were on the rise on Monday as investors remained optimistic about riskier assets due to bullish market drivers from various sources. First, dovish bets have increased as recent data from the US suggests that the Fed may be approaching the end of its tightening cycle. Additionally, investors are hopeful about recent stimulus measures from China towards its property sector, as it could bring significant support to the world's second-largest economy.
Finally, the recent rally in the energy sector, boosted by rising oil prices due to supply cuts from OPEC+ countries, is also supporting bullish sentiment, helping to drive benchmarks higher everywhere.
Today’s session will likely remain calm due to the lack of significant macro developments and data, as US markets will be shut for Labor Day.
The STOXX-50 index still trades above the 4,300 pts level in an attempt to break out of its wedge pattern, which could drive prices further up towards 4,350 pts and 4,375 pts if validated.
Source: ActivTrader
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