06.09.2019 – Daily report. Joy in global trade: Customs negotiations between the USA and China are to continue in October. The news from the previous day will also have an effect on the Asian stock markets on Friday. However, investors in Frankfurt are keeping their powder dry before the important US job data in the afternoon.
DAX slightly up
Now the sun is shining vainly again: After yesterday’s confirmation of new customs negotiations by the Chinese administration, the world looks much better again. The DAX rose by 0.3 percent to 12,168 points by Friday midday, thus remaining above the 50-day line. Yesterday, the indicator climbed by 0.9 percent to 12,127 points – the highest level for five weeks. Germany’s leading index thus gained around 600 points within nine days.
The investors, who had become brave again, also quickly got a new bad news from the German industry: In July, German production surprisingly shrank by 0.6 percent. All important data can be found here: Market Mover
Joy in Asia
The prospect of a settlement in the trade dispute also pleased the Asian stock market. In China, the CSI-300 gained 0.6 percent to 3,949 points. In Japan, the Nikkei 225 took its leave with a plus of 0.5 percent at around 21,200 points into the weekend – the weekly plus thus amounts to 2.4 percent. No miracle, because yesterday also an Insider from China in things customs controversy hoping added: Hu Xijin, editor-in-chief of the state “Global Times” twittered that there were now more opportunities for a breakthrough in customs talks. The journalist is regarded as the mouthpiece of the Communist Party.
Profits in New York
Ergo also applauded Wall Street. The Dow Jones gained 1.4 percent to 26,728 points – in the course of trading, the leading US index passed the 26,800 mark for the first time in over a month. The S&P 500 rose by 1.3 percent to 2,976 places, the Nasdaq 100 climbed by 1.9 percent to 7,863 points. All major US indices have now left the sideways range and jumped above the 50-day moving average.
Yesterday’s strong ADP report was also a source of joy. According to the labor market service provider, the private sector in the United States had created more jobs in August than had been hoped for. Furthermore, the US industry showed strength with its order data in July and the mood in the service sector brightened surprisingly strongly in August. In the new optimism, gold and silver were less in demand again.
Focus on Fed and labor market report
Only a few important dates are on the list today. It gets exciting at 2.30 p.m. when the US Labour Market Report for August is shown on the screens of your trading platform.
The job data will also be of interest to the Federal Reserve. It will decide on possible rate cuts on September 18. Perhaps Fed Chairman Jerome Powell will be carried away by a commentary in the evening. He is taking part in the conference “The Economic Outlook and Monetary Policy” in Switzerland, which starts at 6.30 pm. According to the Wall Street Journal, the Fed is likely to cut interest rates by 25 basis points in two weeks’ time. Let’s wait and see.
The Bernstein Bank wishes you successful trades and a relaxing weekend!
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