Fundamental analytics

RESULTS OF THE WEEK

Trading volatility drops on the eve of Christmas and New Year holidays.  

  1. US and Chinese trade negotiations  

  2. The pound sterling rate falls.

  3. Stock indices growth

 

Last week there was a certain deficit of important economic and geopolitical news on the market. The trading volatility has considerably decreased. But on the whole, positive moods prevailed in the market as the first phase of trade negotiations between the USA and China was completed.

Currency market

The GBP/USD pair showed the highest volatility in the currency market. The euphoria of the Conservative Party's victory in the parliamentary elections has come to an end. Almost immediately after the elections, Boris Johnson outlined a fairly strict position on trade negotiations. The government will try to start the negotiation process as soon as possible since Johnson is against prolongation of trade negotiations. Some media reported that the ruling party may prohibit by law the extension of negotiations. Johnson himself did not rule out the country's exit from the EU without an agreement if London and Brussels fail to agree on a trade agreement draft by the end of 2020. The risks of uncontrolled UK exit from the EU have increased, to which the market reacted by selling British currency. From the peak at 1.35 the pair went down to 1.30.

EUR/USD continues to move sideways quite boringly. This week, mainly positive statistics data was published in the EU. However, the uncertainty around Brexit and strong macrostatistics data from the USA limited the possibility for further growth of the EUR/USD pair. As a result, the trading week was closed almost at the opening level.

Precious metals market

Gold was traded in a very narrow range almost all week. The market received quite controversial information about the signing of an interim trade agreement between the U.S. and China. So far, the parties have not published the details of the agreement. Against the background of continuing uncertainty, demand for protective assets remains high, so gold continues to hold in the current trading range.

Oil market

The oil market has completed the trading week in the green zone. Brent and WTI grew by more than 1.6%. Quotations were supported by positive data on the decline in the U.S. stocks and hopes for improvement in the global economy after the first phase of trade negotiations between the U.S. and China.

Stock market

Positive sentiment prevails on the stock market. Investors positively assess the results of the first phase of trade negotiations between the USA and China. The parties agreed to abolish the previously imposed duties, which will contribute to the improvement of the situation in international trade and growth of the global economy. Last week American indexes updated historical highs. Asian and European indices also concluded trading with a positive result.