Strong data does not interfere with the dovish CB policy
|Markets continue to receive conflicting signals, but a wary mood prevails. Charles Evans from the Fed pointed to the possibility of reducing the rate immediately by 50 points in July, citing the risks of a global slowdown. External causes seem to be used by central bankers as a rationale for the soft policy position, despite the relatively good internal data of the countries. Time after time, indicators from the US, China, and UK surpassed expectations, but this did not change the markets' mood: investors are still preparing for the worst.
Stocks
Key indices continue to follow the tactic "the worse the better." The strong US retail sales data put pressure on quotes, rather than encouraging growth. Despite the fact that Evans' speech softened investor expectations, market participants seemed to prefer to take profits from the previous rally.
The single currency came under pressure following the sale on the pound. EURUSD returned to July lows around 1.1200. In addition, the dollar received support after strong retail sales figures. In contrast, business sentiment in Germany continued to deteriorate due to fears around global risks. Bears' attention could switch now to the area of 1.11, from which the pair rebounded in June 2018 and April-May 2019.
Brent
Oil fell sharply by the end of Tuesday, losing 4.8% intraday to $63.5 per barrel. The sale was provoked by rumours of a decrease in the degree of tension between Iran and the United States. In addition, data from an independent company, API, noted a not so sharp decline in inventories as expected, returning to the market's concerns about an overabundance of commodities. From the technical analysis side, the bearish signal is the fact that Brent has undergone a sale from the 200-day moving average, and this often acts as a significant level.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.