It seems like these days the world, and the traders in it, are doing a lot of waiting; waiting for news about how the Brexit will proceed, waiting to hear if the United States and China will reach a trade deal, waiting to find out if OPEC will impose fresh production cuts to keep oil prices stable. There seems to be a lot going on, until nothing actually happens.
UK Prime Minister Boris Johnson remains at the bring of creating a Brexit deal, a ledge he’s been standing on for quite a few days now. A partial trade deal announced by Washington after last week’s trade talks seems to be the work of fiction rather than a real solution. And destabilizing politics continue to shake the oil markets more than OPEC’s efforts seem to tame them.
Few assets are immune to the news. Even technical traders cannot escape the movements that news sentiments inject into the markets. Unless, of course, the markets aren’t moving much because traders just honestly can’t predict what will happen next with all the open issues that persist.
What’s Happening in the Markets
The British pound was trading just below five-month highs on Wednesday afternoon in Asia on reports that Boris Johnson has made major concessions related to the border disputes between Ireland and the UK which have prevented the Brexit process from progressing smoothly until this point. The currency has risen nearly 5 percent in the past week thanks to the continuing Brexit negotiations, hitting a high of $1.28 against the dollar before retreating slightly. It was trading at $1.2757 as of 1:12 p.m. HK/SIN.
Oil prices were higher on Wednesday after shaking off declines on Tuesday when the International Monetary Fund (IMF) downgraded its growth forecast and weak data from China hinted to reduced demand for oil. Reports that OPEC might increase its production cuts also helped to bolster the markets. U.S. WTI futures gained 0.28 percent by Wednesday afternoon in Asia to $52.96 per barrel while Brent crude futures were up 0.29 percent to $58.91 per barrel.
On the stock markets, most Asian indexes were higher, with the exception of China’s benchmarks, the Shanghai Composite and the Shenzhen Composite, both of which were lower. Asian indexes followed Wall Street higher after a day of declines on Tuesday that was prompted, once again, by lingering trade concerns. Traders should just be aware that these upswings can sour instantly if data continues to show that the global economy is stalling or that a trade deal remains elusive. At this time it seems that only a confirmation of progress will be able to catapult the markets out of their back-and-forth holding pattern.