ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for November 5, 2019. See details below:
FOREX
The dollar is strengthening, gaining ground against traditional safe haven currencies to be up by around 0.25% against both the Japanese yen and the Swiss franc. This market dynamic is inspired by renewed hopes of a phase one deal between China and the US being put in place this month. Trade tensions between the two economic giants pose the greatest threat to the growth of the global economy and any good news on that front will support risk linked currencies, to the detriment of traditional refuge assets like the Japanese yen or the Swiss franc.
Ricardo Evangelista – Senior Analyst, ActivTrades
GOLD
A general risk on mood is still dominating markets. This factor, along with the rebound of the greenback, is pulling down gold with the price now once again close to the key support level of $1,500. The main trend remains positive, even if markets seem to be waiting for fresh catalysts. In the short term there is now clear directionality, with prices moving between $1,480 and $1,520. If the price breaks through $1,520, we could have our first positive signal, as this area has managed to stop all recovery attempts in the last few weeks.
Gold chart
Carlo Alberto De Casa – Chief analyst, ActivTrades
EUROPEAN SHARES
Markets opened little changed in Europe on Tuesday, holding onto yesterday’s gains after the Stoxx-600 Index reached a four-year high. There is no significant retracement or profit-taking from investors today with the risk-on trading stance remains firmly in place. Investors’ risk appetite is still stimulated by strong corporate earnings, rebounding growth expectations as well as optimism towards a “phase one” deal, especially with President Trump said to be considering dropping tariffs on China that were introduced earlier this year. Even if the trend is clearly bullish on stocks, companies’ valuations may cap the trading euphoria on a very short term prospective, which could trigger a brief period of market corrections.
Pierre Veyret– Technical analyst, ActivTrades
DAX-30
The main German index is following the trend registered by other European markets, with mixed early moves on Tuesday. The worst performance is being registered by the Real Estate sector after Vonovia SE reported a rent growth decline (from 4.4% to 4%) echoing the decrease in construction volume after the company missed building permits. Elsewhere, carmakers’ share prices have been given a little boost with the German government said to be increasing cash incentives for electric cars, known as an “Environment Bonus”, in order to stimulate demand. This is likely to have a significant impact on Volkswagen AG, Daimler AG and especially BMW AG whose share price is already trading well above 72 EUR with 73.645 EUR in sight.
BMW chart
Pierre Veyret– Technical analyst, ActivTrades