The new week in the markets begins ambiguously. The Asian trading session generally ended in the negative zone. Here, the main role is played by Chinese stock indexes, which show negative dynamics amid the publication of weak data on industrial production and retail sales, as well as investment in fixed assets. The values of the indicators turned out to be significantly lower than predicted.
At the same time, futures for the main European and US stock indexes are trading in the negative area, which indicates a decline at the opening of stock indices in Europe.
According to the dynamics of the ICE index, the US dollar is trading in the currency market against a basket of major currencies without noticeable changes. In our opinion, this is due to this week's publication of important economic data from both Europe and the United States, as well as the minutes of the Fed's July meeting. If we pay more detailed attention to the dynamics in the major currency pairs, the expectation of the start of negative trading in Europe is supported by the demand for protective currencies. The US dollar receives support against all major currencies with the exception of the yen and the franc. So, it is growing most noticeably against the Australian currency.
Today, the market's attention is focused on the events in Afghanistan, where the Taliban are effectively taking full control of the country, forcing Western diplomats to flee the country. Investors, watching everything that is happening, are weighing new geopolitical risks that can have a noticeable impact on the situation in the Middle East and Central Asia.
Geopolitical risks have a significant impact on the movement of crude oil prices, which are declining.
Analyzing the current situation, we believe that the demand for risky assets will be under pressure today, at least until the opening of the US trading session. So far, the market is dominated by negative notes over positive ones. In addition, traders want to get acquainted with the minutes of the Fed's July meeting and the expected speech of the head of the American regulator, in order to understand whether the risks of an earlier change in the course of the Central Bank's monetary policy are real after the previously published data on inflation and employment are still high.
On the wave of these expectations, the stock indices will most likely decline due to partial profit-taking in company shares and a slight strengthening of the dollar exchange rate.
Forecast of the day:
The USD/JPY pair remains under pressure amid falling demand for risky assets and rising geopolitical tensions. The continuation of such tendencies will lead to the pair's further decline after breaking through the local low of 109.35 to 108.75.
Gold is gaining support amid geopolitical tensions in demand for defensive assets. A price consolidation above 1770.00 will lead it to further growth to 1792.35.
