Equities continue to trade with lower volumes on thin market in the last working days of the outgoing year. On Thursday, enthusiasm for stock purchases declined significantly and then disappeared altogether due to political uncertainty in the United States. Global markets are trading in the red, and unresolved trading tensions are back on the agenda, putting pressure on risky and commodity markets. This week, volatility was in full swing, as a record DOW gain by 1000 points replaced the worst Christmas Eve in the US markets. But this optimism could not last long, because today futures for US indices indicate a weak Wall-Street on Thursday.
In the United States at the end of the year, the focus is on two main topics. This is the suspension of US government work, as well as the continuing criticism of President Trump to Fed Chairman Powell.
On Wednesday, a representative of the US Department of Commerce announced that the agency would not publish economic reports during the suspension of government work. Thus, the agency will not publish statistics on the housing market, and construction, trade, orders for durable goods, GDP, and expenditures and incomes of individuals. At the same time, the ministry will continue to publish reports on the labor market and inflation.
Investors hardly hoped for a partial closure of the government, since US President Donald Trump attracted more than $ 5 billion to Congress to fund the southern border wall.
Oil prices fell on Thursday after an 8% rise the previous day, as investors prepared for weekly data on US oil reserves.
On FOREX, the US dollar is trading volatile, despite reduced volumes. The dollar index is trading within a narrow range of 96.15-96.60 points. We maintain a bearish outlook for the US dollar in 2019, focusing on the weakness of the US dollar against major currencies. Most likely US political drama will only increase, and the strengthening of the domestic political crisis in the US can be expected in the first months of the coming year. This will put a lot of pressure on the dollar, as well as US stocks will remain under pressure. All this may lead to the fact that the Fed will be forced to consider the issue of a pause while raising rates as American regulator has announced some days ago.
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