Money Flows - disappointed markets and rush to safety

Yesterday's interest cuts were expected, but Powell's subsequent press conference and FOMC report were disappointing. Markets wanted to hear more. But with only 25 cut points left, potential loosening brakes, a split Fed and a vague dot plan for next year. Trump has not forgotten to criticize the Fed's interest rate decision immediately after the release.

Despite the initial decline, US markets still rebounded because Powell did not completely rule out the possibility of a final cut next month. Bonds went down, stocks went up, the US dollar went down. The Asian session assimilated the effects also positively but not with great enthusiasm. Japan has kept interest rates, and today Bank of England's decision on the interest rate is pending.

Early indications of futures in European markets point to a weaker opening. We expect cash flows to remain more focused on defensive assets and market participants to be cautious. The yield curves of 10 and 2 year bonds are approaching again, which, if they cross them, could increase the avoidance of risky assets and thus gain the Swiss franc, yen and gold. Keep a close eye on them, because the bond market is now more than a key indicator of the stock market and in particular resources and currencies.

We expect more of a cautious mood today. Developments around the Saudi situation and trade negotiations, as well as the Brexit saga will further have a major impact on market movements. Oil remains under pressure after it became clear that Trump would only attack Iran with sanctions instead of bombs, and Saudi Arabia proved that drones and missiles came from Iran. Iran denied. It is clear that oil production will be restored under Saudi Aramco's assurances.

At the moment, we have a lull in the negotiations, but an interim meeting is scheduled between the alternates of the two delegations. The US and China are about to conclude a temporary armistice before their official meeting in October. There is nothing guaranteed, of course, that you do not accept every positive rumor for the end of the war. The Brexit saga continues. Johnson is wasting time and support, not only in parliament and the government, but also in the Supreme Court. The system tries in every way to block B.J.'s desire. to remain the No - deal Brexit option, which will most likely lead to its removal as Prime Minister. The pound remains in focus.

Read more:

• Risk off after the escalation in the Middle East, markets are recovering in a period of calm
• The macroeconomic events for today’s trading calendar
• The US government has confirmed the attacks, Trump is calling an emergency staff meeting
• Has the war between Iran and the US started?
• US markets remain under pressure, traders await Iran’s response