#SP500:
We are expecting an uptrend to develop in the U.S. stock market. Ten-year U.S. Treasury yields dropped to 1.401%, their lowest since July 2016. The 30-year Treasury touched a record low at 1.855%. The low yields on debt assets increases the investment attractiveness of corporate shares. The investor’s wagered central banks would step in with policy stimulus to support economic growth, U.S. fed fund futures signaled more rate cuts later this year and a near 30% chance of a cut next month. This is a positive signal for the stock market!
Trading recommendation: Buy 3250 and take profit 3300
#BRENT:
Good news and bad news. Oil prices tumbled by more than 3% on Monday, as the rapid spread of a coronavirus in several countries outside China left investors concerned about a hit to demand. Italy reported a third death from the flu-like virus and 150 infections. Iran said it had confirmed 61 cases and 12 deaths, with most of the infections in the Shi'ite Muslim holy city of Qom. Afghanistan, Iraq, Kuwait, Saudi Arabia and Turkey imposed travel and immigration curbs on the Islamic Republic. The U.S. 10-year yield has dropped more than 50 basis points this year. The 30-year bond, typically favored in a risk off environment, saw yields touch a record low. This is a negative signal for the dollar and a positive signal for oil.
Trading recommendation: range 54.40 -56.05
XAUUSD:
We are expecting a downtrend to develop. China is easing some restrictions in the Wuhan province and will allow non-local residents to leave the city at the center of the outbreak. Meanwhile, Guangdong, which has the most confirmed infections after Hubei, lowered its coronavirus emergency response level from its highest. Chinese President Xi Jinping said on Monday will adjust policy to help cushion the blow to the economy from the virus outbreak. This is a negative signal for precious metals.
Trading recommendation: Sell 1690 and take profit 1650
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