Brent crude reached a record low of $ 57
China remains in focus of the markets, setting the agenda. It should be noted that the actions of the people’s Bank of China helping markets to recover after a shock at the start of the week. The NSC has set the official exchange rate of the yuan below the market. Such actions often have serious consequences – especially given that the official dollar rate for the first time in history was more than 7 yuan. Against this background, global stock indices started to gain on Thursday morning, reducing fears about a possible currency wars.
It is likely that NSC will continue to withstand the onslaught of the sellers of the national currency, gradually weakening the position of the yuan in response to fears of a sharp slowdown in economic growth. In fairness, it is not yet the horizon looms: the latest data showed growth of China’s exports in July to 3.3% yoy, contrary to forecasts for decline. On this news, Asian markets continued accurate reconstruction, although it is still far from being able to clear the failure of the beginning of the week. It seems that this wound will heal for a long time.
The stock market
American markets closed the trading environment mixed: S&P500 and Nasdaq gained 0.1%, the Dow lost as much. ChinaA50 rose 1.3% this morning, reducing loss Monday to 2%. Creeping restoration of markets suggests that the situation remains under control and the recent collapse of stock was on hand to investors, making them attractive for purchase. S&P500 confidently bounced off the 200-day mA and continues to develop growth.
Components of S&P500 quickly found support buyers after the recent failure, which is a signal of the dominance of the bulls as it was in March and may. Although investors still remain wary.
The single currency since the end of the day on Monday was stabilized at 1.1200. Pair sharply increased during periods of increased market volatility, however, now not in a hurry to decline, despite the recovery in purchases in the stock markets. Market participants took a pause waiting for further signs of where the market will move. A recent episode of spike on EURUSD escalation of trade conflicts looks like an exception to the General rule, whereas since the announcement of trump’s intention to reconsider the trade agreement with China, the pair declined from 1.23 to 1.10.
The oil inside the day on Wednesday, have lost up to 4%, in early trading on Thursday, gaining 0.7% to 57.60. The sale was strengthened by the fact that the bears managed to push Brent for several important levels: under $60, under the lows of June and, automatically, to the territory of a bear market. Fundamentally, the price of oil undermines the daily deterioration of forecasts on world economy. Many Central banks soften the policy, in order to support its growth, but these measures have a delayed effect in 3-9 months, while the wariness of the regulators and politicians now only adds to the nervousness of the market.
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