ActivTrades’ Market Analysts have prepared for Leaprate their daily commentary on traditional markets for May 13, 2019. See details below:
Forex
Mixed early Monday session for the US Dollar, up against currencies perceived as riskier like the Euro or the Pound, but recording losses against traditional safe heavens like the Swiss Franc. This pattern can be explained by the escalation in trade tensions between the two larger global economies. As new US tariffs on Chinese imports come into place, there is fear that this process could lead to an all-out trade war between the 2 countries, threatening the outlook for the growth of the global economy.
In such a scenario the Euro and even the US Dollar are likely to suffer the downside consequences of a change in mood, to a risk-off stance, which obviously would offer support to the refuge assets like the Yen and the Swiss Franc.
Ricardo Evangelista – Senior Analyst, ActivTrades
European shares
European stocks are drifting lower as the risk-off sentiment persists, especially after President Trump’s latest tweet on China (“…China LOVE ripping off America”). This makes the trade talks continuation more and more uncertain and strongly contributes to investors’ confidence erosion all around the globe. With the exception of utilities, all sectors are down in Europe, with healthcare among the most shorted sectors by investors.
The Stoxx-50 index is currently breaking its 3,307pts (61.8% Fibonacci) support zone and may join 3,278.0pts really quickly if the current mood persists. On the corporate front, the focus this morning is on French carmaker Renault, which has made a formal merger proposal to Nissan. Renault prices haven’t been too volatile so far even though shares in Nissan surged 1.57% at the Tokyo open.
In Geneva the SMI-20 index is 0.55% down as prices have broken out the 9,390.0pts support level and now trades close to a 1-month low at 9,379.0pts.
Pierre Veyret– Technical analyst, ActivTrades