ActivTrades’ Market Analysts have prepared for LeapRate their daily commentary on traditional markets for December 4, 2019. This is not a trading advice. See details below:
FOREX/BREXIT
The pound reached a six-month high to touch $1.3044 during early Wednesday trading. This follows the latest election poll, which points to a widening of the Conservative lead to 12 points. Many market operators now see a comfortable Conservative win as the scenario most likely to provide a quick resolution to the ongoing Brexit saga, liberating the British economy from the constraints of the last three and a half years.
What will happen after Brexit is of course a different story, as a trade agreement will need to be negotiated between the UK and the EU. At that point there will be more downside risk for Sterling, should they fail to reach a deal in time for the December 31st 2020 deadline.
Ricardo Evangelista – Senior Analyst, ActivTrades
EUROPEAN SHARES
Stocks were experiencing higher volatility levels this morning as investors digest the latest developments with the trade talks. Despite the positive tone between the two blocs a few weeks ago, the recent shift in negotiations has made stock markets more uncertain than ever. A real “legislative” battle took place overnight when the US House passed a bill demanding sanctions on Chinese officials for the treatment of Uighur Muslims.
China responded by accusing the US of interfering in its internal affairs and said it will do whatever it takes to safeguard its sovereignty and security. On the trade front, China also warned President Trump the new round of US tariffs will be countered by retaliatory measures, which would “seriously disrupt” ongoing negotiations.
Despite increased volatility, stocks still lack a clear price direction as traders struggle to forge a real opinion on where these trade talks are going. The Stoxx-50 Index successfully rebounded over the 3,600pts zone and may extend its short-term corrective move up to 3,650pts intraday.
Pierre Veyret– Technical analyst, ActivTrades