Chinese Yuan grabbed the attention of the markets in the early hours of trade, as its rate of decline strengthened the theories that the currency was used as a weapon in the trade war. Whether it is or does not remain to be understood. Chinese stocks fall, but the wider market was not worried.
These unrest in Asia have turned our attention away from thetrade wars, and this is certainly a plus.
We expect a housing price index in the UK, and then Mark Carney and the report on financial stability. Orders for durable goods and trade-related tweets will drive the US session.
European markets will start the session with very slight increases driven by the growth of energy companies, both in the US and in Asia. DAX will open 10 points up, CAC40 with 6 points and UKX with 5 points.
Looking at the intraday DAX chart compared to cash flow, it is clear that, despite the short-term price drop, the flows remain at an average of around 0, which is a positive signal. I expect that after the timely start of the session, buyers will take the lead.
Source: Bloomberg Pro Terminal
Chart: Used with permission of Bloomberg Finance L.P.
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