There is a sense of relief among investors today and this is the reason that the European markets and US futures are trading higher today. The reason for this sense of relief is that the US has pushed back against the fear of recessions. This push back is the chief reason that the bond yields have started to recover and the European markets are trading higher. Donald Trump, the US president also assured the markets that the biggest economy in the world isn’t falling into a recession, but he took the opportunity to blame the Fed for what is going in the markets and it is all mainly due to Fed’s monetary policy. He still thinks that the Fed should cut the interest rate more aggressively and it is in this essence that the upcoming meeting on Wednesday, the FOMC minutes command significant attention.
Sterling is on its way to recovery as the opposition leader Jeremy Corbyn has said that he is going to do whatever it takes to bring the parties together in order to stop the no deal Brexit. The time is running out and the deadline is fast approaching for Brexit. The new Prime Minister, Boris Johnson is showing his childish behaviour in dealing with Brexit because a no deal Brexit is not something that any party or voter voted for and for the country this is nothing short of a nuclear disaster. So far, Boris Johnson has made it clear that the parliament has no power to stop the this but he may be facing the reality soon. This is the reason that we are seeing a recovery in the Sterling-dollar pair which was way oversold due to the no deal Brexit. Last week, Sterling closed on a positive note and as long as the support of 1.2015 is respected, it is highly likely that the pair may continue to move forward until it crosses its important moving averages on a daily time frame. The 50-day moving average is trading at 1.2533 and the 200-day moving is at 1.2794, still a long way to go.
Donald Trump has also said that the country is talking with China in order to resolve the on going trade war issues between the biggest countries of the world. But, the situation hasn’t eased off to a level where they are ready to sign the deals. But this was enough to restore confidence among investors who are feeling more relaxed in holding on to the riskier assets. The renewed demand for riskier assets has taken a lot of shine away from the yellow metal and this is the reason that the metal is trading close enough to the support of 1500.