Money Flows before the start of European trading

Last night, the Chinese National Bank stabilized the yuan exchange rate against the normal 7-dollar range, which suddenly reversed sentiment towards the end of the Asian session. The happy dollar went up, the yen and gold down, and European and US futures started to rise. Early indications for Europe are for a stronger opening of official trade. The VIX Fear Index also pushed back from its earlier peak around 23-24.

Cash flows are beginning to re-target risky assets, albeit with caution, because the situation has not yet resolved. There is still the risk of verbal or Twitter shootings between Trump and China. China has shown how they can demolish world markets with just one interference in their currency. In addition to the yuan exchange rate maneuver, the Chinese government is deterring US purchases of agricultural commodities. So far, Trump is losing out, with many analysts likening the "label" he imposed on China as "currency manipulators" as ... "shot in the foot."

Today we expect comparative risk - on, especially if the foundation remains calm and without negative news. The calendar is almost empty today, so markets will be mostly driven by yesterday's residual unrest and in anticipation of the turmoil of the trade war. Brexit remains back in the background as the UK Parliament is on leave until September. In the meantime, with the worsening of the trade war, markets are beginning to appreciate higher chances of reducing interest rates not by 25 but by 50 points next month. Have the markets found a bottom? Today we may get the answer.

Alternatively, "smart money" will again feed on bonds, gold, the yen and the Swiss franc, even with the slightest signs of anxiety and fear. With the recovery of risky assets, oil is expected to continue rising today, which began with the opening of the Asian session.

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