Financial Market Outlook Amid US-China Trade Talks | Podcast
Forecasted market reaction and more: Key talking points on this podcast
- US-China Trade Talks: Stock market outlook bullish or bearish in long-term?
- EUR and USD: Which is worse off?
- Oil price patterns: The Middle East perspective
This time on Trading Global Markets Decoded, our host Martin Essex is joined by Dubai-based IG analyst Monte Safieddine. The financial market outlook is uncertain at this time: How will the US-China trade war develop from this point? What is the outlook for USD and EUR? And what's the Middle East perspective on oil developments right now? You can listen to this podcast with Monte Safieddine by clicking on the link above or one of the alternative platforms listed below.
US-China Trade Talks
Talk kicks off with US-China trade talks. Has optimism started to fade that the two nations can reach an agreement? “I was never that optimistic about the US-China talks,” Monte says. “Look at US-Japan; It’s taken a really long time just for them to get a very limited trade deal that doesn’t even included Japanese automobiles, which was a key point for the Japanese.
“However ,we can’t rule out an agreement, which would of course mean a risk-on play in the financial market, aiding stocks and indexes.”
Would merely a limited deal not cause the stock markets to react badly though in the longer term? “I believe so. The only thing that’s been keeping some of the indexes high, for example the DAX 30, is European Central Bank quantitative easing which is forcing more money into riskier assets.
“So, if the hunt for yields is so difficult in Europe and Japan, people will look where they didn’t before. Stocks will be bullish if we’re expecting more easing.”
EUR and USD look weak: Which is worse off?
On EUR/USD: “From a technical standpoint it’s looking weak; we’ve got a weekly bear trend channel and haven’t been able to break it,” Monte says. On the fundamental side, he adds that Eurozone data is poor and is expected to remain so. “The ECB will restart its bond purchasing program in November, which means it’ll dump a lot of Euros, so it’ll all make for a relatively weaker Euro.”
While the Dollar is also weak, US yields are still positive, and there’s still global demand for USD. “Also, a lot of global debt has been issued in US Dollars and needs to be serviced in Dollars. So USD will always have a leg to stand on.”
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.