ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for December 6, 2019. This is not a trading advice. See details below:
The mood in the markets remains positive despite the release this morning of data that shows the most pronounced drop in German industrial output in the last 10 years. This positivity is drawn from hopes that the US and China will be able to reach some form of agreement before December 15th, when new US tariffs on Chinese imports are due to kick-in.
On Thursday President Trump said negotiations are going well and this was enough to once again turn market sentiment, with risk-on prevailing everywhere.
Most remarkably, the euro is finding support during early Friday trading, despite the fears triggered by the bad news from Germany.
Ricardo Evangelista – Senior Analyst, ActivTrades
European markets had a mixed opening on Friday as traders still struggle to gauge the real state of the US-China trade talks following mixed signals from both blocs. President Trump said they were making progress with the talks with China set to implement tariff waivers for US agricultural products, which is perceived as a positive sign ahead of the 15th of December tariff deadline.
However, the Chinese government also issued countermeasures against US diplomats, putting several US officials on a restricted entity list as part of a retaliation plan over Washington’s Hong Kong bill.
While trade talks remain the biggest driver on stocks, investors will cautiously assess the state of the US job market from today’s NFP report. Volatility spikes are to be expected as most investors foresee 183,000 jobs added in November, one of the largest forecasts in 2019. Figures below that level will disappoint investors and pave the way for further help from the Federal Reserve. This should benefit stocks and kill trading enthusiasm on the US dollar.
The French CAC-40 Index is currently one of the best performers in the eurozone after prices rebounded above the 5,795pts/5,800pts level. The market will however have to clear the 5,835pts zone in order to unlock an extended rally towards 5,885pts and 5,950pts.
Pierre Veyret– Technical analyst, ActivTrades