Sentiment before the European session, Germany in focus

25.10.2019 / 08:08

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On the last day of the week, European markets are gearing up for a cautious start after sessions in the US and Asia ended in the red. The futures of major European indices point to a weaker opening, with investors still uncertain about their optimism over the trade war and Brexit. Economic data continues to deteriorate, but good corporate reports are still encouraging markets.

Early indications:

FTSE 7333 +0.06%
DAX 12869 -0.02%
CAC 5687 +0.05%

Today's European session will be driven by economic data in the calendar, though few are key - Germany's IFO business and GfK consumer climate. The data will shed more light on sectors' sentiment about the future of the economy. Friday, today we will expect cash flows to be withdrawn from risky assets and traders and investors to profit.

Given investor sentiment, "smart money" will potentially boost dollars today, with the Japanese yen expected to rise in price. Because of the uncertainty surrounding Brexit, especially following Johnson's intentions for the December election, the euro and pounds will remain under pressure today. Kiwi confirms our earlier bearish scenario (read here), and we expect sales to continue there. The Australian dollar remains strong after last night's prospects for launching QE from the RBA.

For precious metals, we expect platinum to continue rallying against the backdrop of strong demand and withdrawal from palladium and gold to remain flat. We expect a clear direction there on 30.10 when it is FOMC. Oil begins the day with a decline after its three-day rally. Later in the state session, we expect the number of Baker Hughes oil rigs.

Trader Martin Nikolov

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Sentiment before the European session, Germany in focus

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