Money flows before Europe opening bell - 04.10.2018

Despite the negative sentiment during the Asian session, Europe is heading for a positive start on the stock markets. During the European Stock Exchange, we will most likely see support for the banking sector, mainly because of the FED's resolve to continue raising interest rates in 2019. The second winner will surely be the energy sector, as in the time gap between closure yesterday and opening today, oil has seen a significant growth of almost 2%. This will give a strong impetus to the indices in general and will most likely keep them in positive territory.

During the European Stock Exchange, we do not expect major economic news to have a significant impact on stock indices and FX markets.

The euro is largely backed by Italy's plans to reduce the budget deficit to 2% in 2021. Despite the positive foundation, however, the USD is in the spotlight. The last statement by J.Powell made USD investors return their confidence in the US currency. Earlier yesterday, Powell said the economy is developing very well, inflation stays around the target levels, and unemployment is at the 20-year low.

I expect the positive attitudes for the USD to be retained for most of the European session today, with any small adjustment being convenient for long positioning.

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