Wall Street rebounds on hopes for trade talk progress

US indices closed higher yesterday amid reports that US negotiators would head to Beijing next week for the first face-to-face meetings since the G-20 summit. Tensions are still high in the Gulf while the results of the UK Conservative Party leadership race should be announced today.

US30USD Daily Chart

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The US30 index rebounded yesterday, fueled by hopes for advances in the trade talks and calls from Fed board nominee Shelton for a 50bps cut at next week’s meeting

The 100-day moving average at 26,169 and the 55-day average at 26,245 continue to track each other higher

US existing home sales probably rose 0.2% m/m in June, the latest survey of economists suggests. House prices are seen up 0.3% m/m in May, a slower increase than April’s +0.3%.

DE30EUR Daily Chart

The Germany30 rose for the first time in four sessions yesterday, lifted by the better mood on Wall Street and after ratings agency Fitch affirmed Germany’s AAA rating with a stable outlook

The index has held above the 55-day moving average at 12,203, which has supported prices on a closing basis since June 3

Markets are preparing for the ECB meeting on Thursday, which is widely expected to have a dovish bias but without any change in benchmark rates.

UK100GBP Daily Chart

The UK100 index looks set for a third day of gains today after early trading as we await the outcome of the Tory Party leadership contest. Boris Johnson, a well-known hard-Brexiteer, is expected to be victorious, though his ability to push through a no-deal exit has been curtailed by recent voting in Parliament

The index has traded above the 55-day moving average, which is at 7,384 today, since June 18

Aside from the leadership rules, we have the CBI industrial trends orders index and a speech from BOE’s Haldane on tap.


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