Daily Market Analysis – 25.09.2017
AvaTrade | Sep 25, 2017 05:09AM ET
The tensions between the U.S. and North Korea sparked once again on Friday when North Korean foreign minister stated that they are now considering a nuclear test in the Pacific Ocean. Safe-haven demand increased especially in the Asian region, helping the Yen gain value and causing Japanese markets losing their early gains. China was also lower after Standard & Poor’s downgraded the sovereign debt.
European markets managed gains on Friday as strong PMI data from across the Eurozone helped offset investor worries. Both Germany and France reported PMI’s that were at 76 and 77 month highs respectively, and the composite Eurozone PMI was at a four month high. The investors were cautious ahead of the Sunday German Federal Elections, although Germany’s DAX did edge slightly lower by 0.1% by the close.
U.S. markets slogged along just below unchanged levels for most of the day Friday as rising geopolitical tensions weighed on risk appetite. A rally late in the day sent the major indices mildly into positive territory, although the Dow finished with a slight loss, even though 22 of the 30 companies in the index were in positive territory at the close. Manufacturing PMI was higher than expected, but services downbeat PMI offset it.
h3 Today’s Assets/h3 h3 EUR/USD/h3The pair rose to tap 1.2000 intra-day on Friday, but then dropped back and finished basically unchanged as traders were cautious ahead of German Federal Elections. The course of the pair in the coming week will be influenced by the election results, meaning we may either get a pop above the resistance at the 1.2000 level, or a drop back to support at the 1.1850 level.
h3 DAX /h3Germany’s benchmark index came under cautious pressure on Friday afternoon, giving back gains as investors decided to stay on the sidelines ahead of the elections. While expectations are nearly 100% agreed that Angela Merkel will retain the chancellorship, there are questions regarding her choice for a coalition partner, and that choice will have implications for the Germany economy and fiscal decisions moving forward.
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