Markets are balancing against the background of trade wars

The next escalation of tension in the trade war between Washington and Beijing again forces investors to show a high degree of caution, which affects the demand for risky assets, and first of all for the shares of companies.

The latest economic statistics from both the US and China showed that the efforts of D. Trump, aimed at shifting the trade balance in favor of America, did not help. He not only declined, but even grew in favor of Beijing. This clearly indicates that the efforts of the Administration and the President personally are in vain. And if there are no significant changes, it will be possible to say that his initiative does not give the desired result, and threats to increase customs duties on imports from the "heavenly" for another $ 267 billion will only cause a deterioration in trade and political relations between the countries.

In the wake of these events, the New Zealand and Australian Dollars remain under pressure in the foreign exchange market, which react negatively to relations between the US and China, as the economies of New Zealand and Australia are very dependent on exports to China. Given this state of affairs, it can be assumed that the currencies of these countries will continue to suffer a negative impact from the trade war.

At the same time, the euro and the British pound froze in anticipation of the outcome of the meetings on the monetary policy of the ECB and the Bank of England. The latest news regarding the conditions for the UK's withdrawal from the EU has instilled optimism, which is supported primarily by sterling, but also does not allow the euro to fall. The hope that by November a satisfactory agreement can be entered into, while it is the main factor in stabilizing the euro and pound exchange rates.

The Russian ruble rose sharply on Tuesday due to a positive opening for Russia of an economic forum in Vladivostok, a rise in crude oil prices, and a sharp drop in OFZ yield amid talks that the CBR may not raise interest rates at the next monetary policy meeting.

The Canadian dollar is also noticeable, according to Tuesday's results, added. It gets support, thanks to the hopes that an agreement will be reached between Canada and the US on NAFTA, as well as a sharp increase in quotations of "black gold", which jumped on the wave of the hurricane Florence approaching to the US coast.

In general, characterizing the situation on the markets, we note that the main factor that is driving the markets is still the trade war between Washington and Beijing, as well as the general escalation of tensions in the world, produced by the US and personally by D. Trump.

Forecast of the day:

The EUR / USD currency pair is trading in the range in anticipation of the outcome of the ECB meeting on monetary policy, as well as Brexit news. It is likely that it will remain in the range of 1.1530-1.1660. We consider possible its local purchases from the lower border and sales from the top.

The AUD / USD currency pair is trading at the level of 0.7100. The escalation of the trade conflict between the US and China will have a negative impact on the pair. The consolidation below this mark will lead to the continuation of the price drop to 0.7025.

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