Daily summary: Mixed session for equities, U.S. dollar remains strong

• Stocks lose steam in the afternoon

• EURUSD near the 1,17 mark

• BoE’s Bailey cools negative rate expectation

Throughout Tuesday global stocks have been trying to recover from yesterday’s slump. However, European equities lost momentum by the end of the session and ended the day mixed. DAX added 0.41% while FTSE 100 rose 0.43% - in both cases off the day’s highs. On the other hand, CAC 40 finished the day 0.40% lower while IBEX 35 lost as much as 0.65%. 

In spite of the fact that American equities started the session slightly higher, an upward seems to have faded away too. S&P 500 is still trading in the green, but Dow Jones has already fallen below the flatline. The U.S. dollar remains strong, as a result the EUR/USD has been slowly approaching the 1,17 mark today. The pound tumbles anew amid fresh U.K. virus restrictions. Gold prices go down and seesaw around the $1,900. Silver prices fall as well, but the scale of the sell-off is rather minor compared to yesterday’s slump. 

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In terms of economic calendar, investors witnessed key central bankers’ speeches today. BoE’s Governor Bailey dampened negative interest-rate speculation which helped the pound in the first part of the day. In the afternoon markets were focused on Fed Chairman Powell and Treasury Secretary Mnuchin as they both testified. Apart form that, Riksbank kept its main interest rate at 0.0% while U.S. existing home sales rose 2.4% MoM in August (in line with expectations). 

Tomorrow at 3:00 am BST the RBNZ will announce its interest decision. Later investors will be focused on PMI reports from European countries - the data will be published in the morning. United States will publish PMI indices in the afternoon as well while markets will once again pay attention to Powell’s speech. Oil traders might be interested in EIA’s weekly crude oil inventories data.

The pound caught a bid as Governor Bailey cooled negative interest rates expectations today. Nevertheless, sellers seem to have regained control again in the second part of the day. The Fibo retracements (127.2% and 161.8%) may come into play should the current sentiment prevail. Source: xStation5

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