Yesterday, European stock markets sharply corrected in fear of “hard” Brexit and renewed official rhetoric about it. Today, most European stock markets continue to decline, in anticipation of British Prime Minister Theresa May’s speech, during which investors hope to hear details of the UK position on Brexit. Fears that Britain is moving towards "hard Brexit" strengthened, followed by pound dropping to the lowest level against the US dollar over the past three decades. US indices futures traded in the red today losing half of percent.
Oil prices slightly gained, enabling energy companies to retain their positions. Support for oil came from minister of Saudi Arabia’s statement and his expectations about oil market "rebalancing" by the end of the year. This week, the market focus will be shifted towards the crude inventory data in the US and the presidential inauguration. We expect that this week the oil trading will take place within the current range of $ 54.45- $ 56.70.
The gold market continues upward trend. Last week, gold prices has gained amid uncertainty over the UK’s hard Brexit rhetoric and UK trading in European Union as whole. As long as US dollar looks weaker and US equities are overheated, investors are cautious before the inauguration of Trump on January, 20. Gold market looks attractive as classical safe haven asset. However, the medium-term outlook for gold remains unclear, the middle of January and the current week in particular, is full of news of the fundamental long-term nature.
In the currency market of Forex, Eur / Usd pair continued to gain. Europe is slowly returning to growth amid industrial sectors acceleration and the positive expectations of European managers in 2017. (Strong PMI). Nevertheless, the political risks are high in Europe this year like never before. The beginning of Brexit and European elections among the strong nationalist sentiments are high risks for the European currency. From technical point of view, today, the market is approaching the strong resistance level of 38 fib (Eur1.0685-Eur1.0705)
Today, restrained sentiment continues to be present in the markets. Most global indices are in the red. Today, the Davos Economic Forum starts and the attention will be directed to the Prime Minister of Great Britain T.May and Chinese President Xi Jinping. In addition to that, today, series of FED officials’ speeches are in the market’s focus.