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Another day of good news from the East
07.02.2020, 11:22

Another day of good news from the East

Yesterday morning we heard about the reduction in Chinese tariffs on US goods that had been agreed on the first phase of the agreement between the USA and China. In addition, the positive results of some listed companies also caused the main stock exchanges to close the day upwards.

In Europe, more specifically, this was the fourth consecutive earnings session, where the main European index ended up valuing 0.44%. In the last few days, it was constantly seen a greater demand for higher risk assets (as is the case of the stock market) to the detriment of the debt market, however yesterday, the yields on debt market bonds have stabilized, where there were mixed results (in which they grew in some economies while they ended up decreasing in others).

After the good news for the American economy coming from China regarding its tariffs, it was possible to observe an appreciation of the dollar against the euro, right after the opening of the American market. That turned out to be the trend for much of the day, when the euro then loses value.

As regards the EUR/GBP pair, the euro's gain against the pound further reveals the uncertainty of what future Brexit negotiations may be. News have also been revealed that European financial regulators (known as MiFID II) will seek to tighten up existing regulations which would then have a negative impact on the UK's main economic sectors.

Oil, on the other hand, has been rising for part of the day, however this trend eventually reversed. Behind this change in trajectory is the conclusion that came from the meeting that brought together the technical committee of OPEC and Russia in which they did not reach an agreement regarding possible cuts in production. Apparently, there was some resistance on the part of Russia for this to happen.

With regard to gold, it was possible to observe an appreciation throughout the day of yesterday. At the origin of the rise is the still present uncertainty related to the coronavirus. Then the price of gold is still relatively low compared to what happened last month - so there may still be investors thinking about this asset as an opportunity to diversify their portfolios.


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