Global stocks mixed as Trump softens tone on stimulus
Global equities were mixed as investors remained concerned about stimulus in the United States. In Europe, the DAX, CAC 40, and Stoxx 50, declined by 0.47%, 0.30%, and 0.35%, respectively. In the United States, futures tied to the Dow Jones, S&P 500, and Nasdaq 100, rose by more than 0.50%. The recovery comes as Donald Trump appeared to soften his stand on stimulus. In a tweet, the president requested lawmakers for $25 billion for airlines support, $135 billion for paycheck protection, and also funds for the $1,200 checks to individuals. Analysts believe that congress and the White House will reach an agreement before election.
The British pound declined against the US dollar as the market continued to worry about Brexit. While the two sides are still negotiating, there is still a likelihood that they will not reach a deal. For one, Emmanuel Macron has said he will not support a deal without guarantees about fishing deals. Meanwhile, in a statement, UK international trade secretary, Lizz Truss said that the UK still believes it is possible to reach a Canada-style agreement. Meanwhile, the Halifax house price index rose by 1.6% in September. It rose by 7.3% on an annualised basis.
The price of crude oil declined slightly as the market reacted to the stimulus impasse and the rising stocks in the United States. Brent, the international benchmark, declined by 2.32% and the West Texas Intermediate (WTI) declined by 2.80%. In its weekly report released yesterday, the American Petroleum Institute (API) said that stocks increased by 951,000 barrels in the previous week. The EIA will release its inventories reading later today. The price was supported by an ongoing strike in Norway and the ongoing storm in the gulf.
The EUR/USD dropped to an intraday high of 1.1724 in the Asian session. It then pared back some of these losses and is now trading at 1.1775. The day’s low is along the ascending trendline that is shown in green. It is also slightly above the 25-day exponential moving averages (EMA). The price is above the neckline of the head and shoulders level of 1.1750. The Relative Strength Index (RSI) has started rising close to the overbought level of 70.
The hourly chart shows that the XBR/USD pair has been rising since October 2 when it dropped to a low of 38.87. The pair reached a high of 42.96 yesterday and then dropped to a low of 41.67 today. The price is still above the 25-day and 15-day exponential moving average. The Average True Range (ATR) has fallen, which is a sign that volatility is easing. Therefore, the pair is likely to continue falling as bears aim for the next support at 41.50.
The USD/JPY rose to an intraday high of 106.10, which is the highest level since September, 14. On the four-hour chart, the price is above the 25-day and 50-day exponential moving averages. The price is slightly below the 38.2% Fibonacci retracement level. The RSI has moved close to the overbought level of 70. The force index has also moved above the neutral line. There is a likelihood that the pair will continue rising as bulls aim for the next resistance at 106.50.