- Friday's session on global financial markets ended sharply higher for European indices. In the case of Wall Street, the gains were not so uniform, with mainly small market capitalization companies rising. The technology Nasdaq closed the day's trading nearly 0.39% lower.
- The new week begins with a continuation of bullish sentiment in China on the back of a broad plan to cut interest rates and implement additional measures to help stimulate the economy. The indices there are extending their robust gains, with Shanghai indexes, among others, trading 7% higher today alone.
- The People's Bank of China announced over the weekend that it will instruct banks to lower mortgage rates for existing home loans before October 31. In addition, the three cities of Guangzhou, Shanghai and Shenzhen have announced home buying facilities.
- The mood is extremely positive at the moment, but it should be remembered that all this is happening before the National Day holiday. As a result, Chinese markets will have a week-long break starting tomorrow. Domestic markets will not resume trading until October 8.
- As a counterbalance to the good sentiment in China, the Caixin PMI data came out at 49.3 (previously 50.4) for manufacturing and 50.3 (previously 51.6) for the services reading.
- The USDJPY pair starts Monday's trading with an extension of declines. According to the macro data, August retail sales came in at 2.8% y/y (2.3% was expected), while industrial production fell 3.3% m/m (-0.9% was expected) over the same period.
- The most important macro event of the day, which is likely to raise market volatility during today's trading, is CPI data from Germany (headline reading at 1:00 p.m. BST; however, a spike in volatility may occur at 09:00 a.m. BST, when data from individual states will be known). A Chicago PMI data reading and speeches by Powell and Lagarde are also scheduled in the afternoon, but it is unclear at this point whether the bankers are going to refer to the current monetary situation.
- On the geopolitical side, attention turns to the Middle East, where reports suggest that Israeli forces are focusing on the northern front and preparing for a ground invasion of Lebanon.
- Antipodean currencies are currently doing best in the FX market. Declines are seen primarily in the Swiss franc and the US dollar. Natural gas is currently losing nearly 2% on an intraday basis. In contrast, we are seeing slight increases in the oil and gold markets.
- Bitcoin halts the bullish rally on Monday morning and retreats 2% to the $64,600 level.
Current volatility on individual currency pairs. Source: xStation
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appThe content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
