Money Flows before the start of the European session

20.09.2019 / 08:00

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The US and Asian markets experienced more mixed sessions than extremely strong ones. Despite the Bulls' attempt to push the markets to fresh peaks after the Fed, Trump's trade talks rhetoric and his White House advisers did not allow that to happen. Despite positive expectations of a temporary deal at the mid-term meeting before the official meeting in October, the two sides again exchanged threatening calls.

Early indications of European futures point to a cautious opening, with DAX down 0.2%, UK100 0.1% and CAC around 0.1 - 0.2%. We expect sentiment to be shaped mainly by the news around Brexit and the trade war, because today we have almost no essential foundation in terms of quality and quantity in the calendar.

We expect cash flows to shift more to the Swiss franc and gold, and the dollar to continue weakening amid the Federal Reserve's REPO operations. With the continued assimilation of FED data, we expect bond yields to continue to decline.

Elsewhere, oil is expected to remain in an unpredictable direction today until things are resolved to restore Saudi Aramco's production capacity. For the moment, "black gold" has been consolidating after strong chop movements over the past four days because of uncertainty in the Middle East. There may be more news about Saudi Aramco's actual assessment of damages. Keep in mind that the more they slow down, the more expensive oil prices will go up. Increasingly optimistic will have the opposite effect. Personally, I would not recommend you to trade oil until it is clear when, how, and how much Saudi Aramco will be 100% ready. Moreover, you can no longer assume in your mind that such an attack could happen for the third time.

It's Friday. Trade cautiously, beware of your ego, and remember that sometimes staying away is the right decision.

Trader Martin Nikolov

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Money Flows before the start of the European session

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