Asian markets are growing in the hope of stimulus, while Europe and the US are waiting for signals from the central banks. China continues to struggle for economic growth, as it aims to resist the effect of trade disputes with the U.S. The editor of an influential Chinese newspaper revealed that national incentives were being prepared in order to support economic growth both inside and outside the country.

Meanwhile, Germany’s finance minister promised impressive incentives in the event of an economic crisis. In addition, the risks of Britain's exit without a deal are being reduced. All these promises prove to be an important contributing factor towards market dynamics.

Positive background since the beginning of the month returned the demand for stocks to the markets and reduced the demand for protective assets, including long-term government bonds of developed countries and gold. But there is a striking rotation in the markets for high-tech equities, tied to the start of the new fiscal year. However, it is worth noting that the major U.S. indices have changed little over the previous three trading sessions. This represents a worrying sign that new money is not forthcoming – at least until governments launch new measures and central banks start a fresh round of easing.

The currency market, as an indicator of investor sentiment, demonstrates the belief in the success of China's stimulus measures – seen in the growth of AUDUSD by 2.8% in just over a week. The Japanese yen lost 2% during these days, also reflecting the increase in demand for stocks and lower demand for protective government bonds. The CNY is gaining ground, which is also a reflection of increased local optimism.

At the same time, the EURUSD pair froze at levels just above 1.1000 in anticipation of new signals from the ECB on Thursday. It is an important signal, illustrating that most players still view the current situation as an opportunity to choose the signals of a further trend. Therefore, the situation in the Asia-Pacific currencies may change in the coming days, despite the positive dynamics that have been in place since the beginning of the month.

Furthermore, it should not be forgotten that the trade conflicts have seriously eroded economic growth, which can be seen in the fading rates of employment growth in the U.S. and the close recession in Germany. At the same time, the trade disputes remain unresolved, preserving the risks that currently hang over the markets.

Thus, one should be very cautious about the current growth trend in Asia, as it may reverse at any time if governments and regulators fail to meet market expectations.

EURUSD

 

AUDUSD

 

SPX

 

usdcnh

FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.

Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD extends its decline amid upbeat US consumer confidence

EUR/USD is extending its falls toward 1.1050 after US Consumer Sentiment beat expectations with 92 points. Earlier, retail sales met expectations. 

EUR/USD News

GBP/USD rises above 1.24 as Brexit uncertainty prevails

GBP/USD hits a 6-week high above 1.24. The DUP dismissed reports that it would accept special treatment for the province as a solution to the backstop. The EU is ready to grant a Brexit extension as Johnson faces growing criticism.

GBP/USD News

USD/JPY: holding in higher ground ahead of US Retail Sales

Risk appetite dominates the financial world, weighing on safe-haven assets. US Retail Sales and the preliminary Michigan Consumer Sentiment Index up next. USD/JPY bullish case prevails, 107.45 critical Fibonacci support.

USD/JPY News

The good, the bad and the extremely ugly crypto

XRP is in a borderline situation and with little room for doubt. Bitcoin demonstrates its power and positions itself as the emerging leader. Ethereum is in an intermediate situation, far from risk but also from opportunity.

Read more

Gold remains on track to end week below $1,500

The troy ounce of the precious metal rose above $1,500 but failed to preserve its strength as the upbeat market sentiment made it difficult for the safe-haven gold to find demand. 

Gold News

Forex Majors

Cryptocurrencies

Signatures