The Euro is attracting more buyers in the market
The Chinese government announced the “easing financial conditions”, which is intended to spur government spending and support economic growth. In addition, market participants continue to put in quotes the shift in monetary policy this year.
As at the end of 2018го and in 2015m monetary easing in developed countries and incentives in the developing countries return the demand for risky assets, expanding markets to growth and fueling higher prices on the commodity exchanges. At the same time, the experience of the financial crisis of 2007/2008 does not allow to forget that such a policy does not solve the problem, but only generates bubbles in the financial system, stimulating the so-called “steroid” growth markets.
The stock market
The Chinese index is added by 1%. In addition, there is a demand for us stocks in anticipation of rate cuts by the fed next week. The SPX index rose to 2900, developing the increase since the beginning of the month to 5.9% and gaining more than 70% of failure during the month of may. Such a sharp transition from fear to optimism looks unsteady, but at the moment it is difficult to find barriers to growth. Dramatically reduce the chances of mitigating unless the jump in inflation in the publications of the CPI and PPI in the next two days.
The single currency during the day on Monday received support on a decline below 1.13000: couple continue to buy cautiously, lifting her up to 1.1320. Interestingly, while the dollar was little and adds to the other most popular currencies. Now the Euro maintains restrictions that stifle the freedom of the ECB on the scale of the easing of political attitude.
Gold fell to 1325 in the area of the lows of Monday. The recovery of demand for stocks is playing at the moment against the metal. Fundamentally, the mood can turn when a new wave of fears in the financial markets, and increasing inflationary pressures. In the first case, investors choose gold as a safe haven. Second as protection of capital from inflation, which is caused by excessive softness of the banks.
The British pound on Monday again came under pressure due to uncertainty in connection with Brexit. One of the candidates for the post of Prime Minister of Britain Harper said yesterday that he wants a new deal by leaving the EU, which took GBPUSD 0.6%, dropping a pair at some point to 1.2650. Morning GBPUSD is trading close to the 1.2680. It is worth noting that the pound had fluctuated under the mark of 1.2550 (0.8% below current levels) only during periods of extreme fears around messy Brexit. Without scary news on that front, current levels are regarded as an opportunity to buy an extremely oversold pound.
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