Negotiations on Brexit and statistics from the U.S. were the focus of market attention last week
Weak statistical data from the United States
New Brexit agreement
Slowdown of the Chinese economy
Last week's market movement was determined by the news from Brussels and Washington. Negotiating groups of Great Britain and EU made every effort to work out a new agreement on Brexit before the EU summit. The task has been successfully accomplished, but the uncertainty surrounding Brexit remains very high.
In the United States, investors followed the publication of macrostatistics and corporate reports. Both in the first and in the second case there were some surprises.
In the currency market the main attention of investors was focused on the GBP/USD pair. Negotiations on Brexit significantly increased the volatility of trading. With the conclusion of a new agreement between London and Brussels announcement, the currency pair updated 5-month highs of trades. As a whole, at the end of the week the GBP/USD pair demonstrated growth at the level of 2%. But the market can very quickly move from growth to decline in the event that the British parliament does not approve the new agreement with the EU. Parliamentarians rejected the draft agreement of Theresa May three times, it is likely that the "Groundhog Day" is waiting for Boris Johnson too.
The EUR/USD pair also ended the trading week in the green zone. The main driver was not only the news related to Brexit, but also a series of weak statistics from the U.S. Unexpectedly weak report on retail sales increased investors' concern about the prospects for the U.S. economy. Therefore, the dollar demonstrated weakness across the entire spectrum of the market last week.
Precious metals market
Gold was trading in a very narrow price range all week. On the one hand, support to precious metals was provided by weak data of economic statistics from the USA and downward dynamics of the dollar index movement. On the other hand, the pressure on gold was provided by rather positive reports of American companies and increased interest in risky assets on the background of a new agreement on Brexit conclusion.
The oil market traded in a narrow range for most of the week, keeping the sideways vector of the movement. Price continues to be pressured by the investors’ concern regarding excess demand. The support factor was the situation on the stock market, where the main indices demonstrated positive dynamics of trading, indicating the increased interest of investors in risky assets.
Major European and American indices finished the trading week in the green zone. For the European stock market, the main driver of growth was the news about the approval of a new Brexit contract. The U.S. stock market kept the upward trend due to optimistic reports of the companies included in the S&P 500.