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The pound sterling (GBP) clearly outperformed the euro and also the weakened dollar on Wednesday, with the GBP/USD pair moving to a new six-week high as there are still hopes that the negotiations on an agreement between the EU and UK after the end of the transition period for Brexit, which ends this year could continue.
Precious metals including gold and silver traded higher on Wednesday but the move was still rather restrained and by Thursday morning again a retracement set in. Multiple analysts believe in the upside potential for precious metals given the possible uncertainty from the US Presidential elections and also increased deficit due to fiscal stimulus measures and possibly rising inflation. However, so far the gold prices have been trading in a relatively restricted range despite these risks from all sides.
The Bitcoin rally continued with the biggest cryptocurrency by market capitalization, which by now reaches more than $230 billion, moved to a new 15-months high and briefly traded at above $13,000 per coin. Other major cryptocurrencies like Ethereum and Ripple this time also followed Bitcoin’s move to the upside but on a weekly basis are still significantly behind its performance as Bitcoin rose over the past seven days by almost 12 per cent.
On Thursday the weekly US initial jobless claims numbers will be published. Also Leading Indicators and existing home sales data will be released. Later in the Asian-Pacific trading session consumer price index (CPI) statistics from Japan and New Zealand can be expected.
While the US dollar continued declining in value against other major currencies, the EUR/USD pair made only moderate advances higher. This could have been the case since the euro itself was not in a position of strength compared to other major currencies including the pound sterling (GBP) and the Japanese yen (JPY).
As the US Presidential election is by now only two weeks away, analysts still see uncertainty what the outcome of the election might bring for the markets. An analyst from Standard Chartered interviewed by CNBC mentioned that the dollar could continue facing pressure due to the significant fiscal deficit and also the worst trade balance deficit in 15 years.
On Thursday the German GfK Consumer Climate Survey and the French Business Climate Indicator will be published.
The adverse global sentiment also pushed European stock market indices lower with the Europe 50 index opening on Thursday night at the lowest level in 20 days. The market was possibly also impacted by the negative sentiment in the Asian trading session following the IMF growth forecast reducing expectations for the Asian-Pacific region.
During the trading session on Wednesday airline stocks like AirFrance KLM and Lufthansa were some of the worst performers in the market, losing well over four per cent in value.
Stocks of Renault managed to close in the green, while other car makers like Fiat Chrysler or BMW lost less than the market average.
Earnings results can also be expected from across Europe as companies including STMicroelectronics, L’Oreal, Unilever and Dassault Systems.
Oil prices took a dive following the release of the weekly dataset from the Energy Information Administration (EIA), which reported that crude oil stockpiles fell by one million barrels over the past week but gasoline stockpiles unexpectedly rose by 1.9 million barrels over the same time-frame. Distillate stocks continued decreasing at 3.8 million barrels, which is less than in the previous week, where the decline reached 7.2 million barrels.
On Friday the U.S. Baker Hughes Oil Rig Count will be presented. Last week the number of oil rigs in operation was for the first time in a quarter reported at above 200 after the figure stagnated around 180 in the months following the pandemic which saw the price of some oil contracts go below zero.
Major stock market indices continued to face downside pressure as it becomes more evident that no stimulus deal will likely pass the legislative process before the upcoming Presidential election.
After a rather calm trading session on Wednesday, shares of the electric car maker Tesla saw some upside in after-hours trading following the release of the company’s quarterly results. The company reported its fifth consecutive profitable quarter and managed to outperform expectations on both adjusted earnings per share and revenue, which reached $8.77 billion.
The company however also incurred significant expenses as it builds two new factories, one in the State of Texas and another in Germany and according to the company CEO Elon Musk it could take even two years until these new factories reach full capacity.
On Thursday earnings from companies including American Airlines, Coca-Cola, AT&T, Citrix Systems, Seagate and Intel can be expected.
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