Brexit fights it out to be number one
It’s going to be an incredibly busy week in the markets, with central banks, British politics, earnings season and the almost-forgotten US jobs report fighting for the spotlight.
On this side of the pond at least, Brexit may just take it. The EU may have agreed to the extension request reluctantly submitted by Prime Minister Boris Johnson – or Parliament as he’ll claim – but the time-frame of such an extension will likely depend on Jeremy Corbyn and the Labour party who desperately want an election, apparently, they’re just not quite sure when.
Corbyn was hoping the EU would solve this little conundrum for him with their extension but it seems the ball is back in his court and it’s now up to him to decide if he would like an election first. Meanwhile, the clock ticks down to 31 October, a date that will no longer be quite as frightening as it once looked to be.
Latest spike gives hope to gold bulls
Despite spiking close to $1,520 on Friday, gold is back trading around the $1,500 handle this morning, leaving bulls and bears wondering exactly who is in control. The break below $1,480 late last month looked to be a clear signal that gold had entered into correction mode, a move that in itself took some time to happen.
Ever since then though, the bears have struggled to fully get a grip of the yellow metal and it seems the tug-o-war between the two may have moved back in the bulls favour. We’re yet to break back above $1,520 despite three attempts to do so in October but a look below shows a steady incline in prices. Not good news for the bears that thought their hard work had been rewarded in September.
Oil spurred higher by trade war optimism
The only person that can give equity traders a run for their money when it comes to eternal optimism is Donald Trump when it comes to the trade war. Fortunately, that optimism appeared to filter through to oil traders in the back half of last week, prompting a move back above $60 in Brent to its highest point in more than a month.
Of course, this comes after prices sunk back towards the summer lows in the $55-57 range as the traders turned gloomy about growth prospects. Oil prices are far from out of the woods yet and I fear it won’t take much for prices to tumble again but given where we were earlier this month, $62 is a good place to be, albeit a notable area of resistance in itself.
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