Recessions fears are growing and this statement picks up even more strength in the light of recent German factory orders data which fell short of expectations. The actual number came in at -0.6%. It missed the forecast of -0.4%, but it was much better than the previous reading of -2.4%. This economic number has set a negative tone for the markets.
US futures and European markets are also trading soft because investors do not seem to be happy about the narrow focus of the trade deal. According to recent developments, the range of topics up for discussion between the US and China has narrowed considerably. China is reluctant to agree on a broad range deal and this doesn’t set a positive tone ahead of the important negotiation meeting the two countries. China needs to understand that it is dealing with Donald Trump who is capable of doing anything. The upcoming negotiation talk on the trade front provided a lot of support for the bulls and the hope was that perhaps both countries would be able to mend some of their relations. But, under these new circumstances, there is always a threat of these negotiations not taking place altogether if Donald Trump also takes a back step.
Range Base Trading For Sterling
On the Brexit front, the Sterling dollar pair is expected to trade in a range between 1.20 to 1.26. In order for us to break this definitive range, we need a fresh catalyst on the Brexit front. However, that seems unlikely because the negotiations between the EU and the UK have come to a standstill and there is enormous pessimism from the EU about a likely deal before the 31st of October. Another extension of Brexit is the most likely option and this means that the current uncertainty will continue to impact the economy into next year. Another extension will give more time for the lawmakers to hammer out another deal and it certainly fades the threat os no-deal Brexit. But then the question is that these lawmakers have not been able to accomplish anything for the past three years, what can they do now?
Oil Suffered Its Worst Week Since July
As for the oil market, it is trading slightly positive today after suffering from heavy losses last week. It suffered its worst weekly loss since July. It was the string of dismal economic numbers that sparked the sell-off because traders became concerned about global growth. Despite these heavy losses, the OPEC cartel doesn’t see any strong reason to cut the oil supply because according to them such thoughts are premature
