Stocks recovery fades, GBP and MXN in play

Beginning of the new trading week brought declines on the Chinese stock markets. However, the moods improved once the European trading started and in turn we saw almost every blue chips index from the Old Continent finishing significantly higher. Key news from the European trading hours was decision of the Angela Merkel to resign from running for re-election as the CDU party leader and as the German Chancellor once her term ends in 2021.

When it comes to the US equities the beginning of the trading session on Wall Street looked promising. All major US equity benchmarks surged but as the time passed gains began to erode. The US stock market highlight of a day were news of IBM acquisition of Red Hat. In turn Red Hat shares surged over 40%.

On the FX market we saw a shift away from the safe haven currencies. JPY and CHF are among the weakest in the G10 basket. US dollar is the top performing major currency with SEK and NZD lagging not far behind. GBP was subject to increased volatility today as Philip Hammond, the Chancellor of Exchequer, presented budget proposal. The decision whether to accept it or not is yet to be made. Another highlight from FX market today is a huge decline in the MXN valuation. The currency plunged following news that Mexicans voted in favor of canceling the international airport construction.

Moving on to the commodity market we can see an interesting development. Commodities are considered riskier investments but even despite a broad recovery on the global equity markets no similar trend can be spotted on this market. One reason behind this can be USD strengthening. Coffee, industrial and precious metals are among the biggest laggards.

Most of the major cryptocurrencies managed to post some gains over the night. Nevertheless, moods on this market were spoiled later on and in turn we are observing significant declines in the late afternoon.