China intends to raise $3.8 trillion to generate more jobs

Daily Analysis - 26/09/2018

China, Europe, and Russia combined forces

The newest indication of the increasing tension among the US and its partners, the European Union's foreign policy chief stated on Monday that the union is creating a new payment tool to enable countries to negotiate with Iran while avoiding U.S. sanctions.

Named the "special purpose vehicle" (SPV), this tool would try to "assist and reassure economic operators pursuing legitimate business with Iran," according to a common announcement published by the remaining members of the Iran nuclear deal, Britain, Germany, France, Russia, and China.

On Tuesday Federica Mogherini said "This will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world,"

Dollar trades at near 10-week high vs yen

On Wednesday the Greenback held to close ranges as investors centered their attention on the FED policy report later in the today while global markets worry over an escalating trade dispute among the United States and China. The USD slid versus the New Zealand and Australian dollars, which remained somewhat underpinned by a review giving a bounce in New Zealand business opinion. Global markets have remained on edge during the past few months as the heated China-U.S. trade conflict spark uncertainty about the scope for global growth and expansive monetary policy for some advanced and emerging market economies.

Gold prices still steady waiting the FED

On Wednesday gold prices traded in a tight area as investors anticipated signs of the U.S. FED conference. Policymakers are anticipated to increase interest rates for the third time this year.

Spot gold went up 0.1% at about $1,201.60, having and went in a $3 range early today. U.S. gold futures rose 0.1% as well to $1,206.0 an ounce.

National Australia Bank economist John Sharma said. "People are waiting for cues from the Fed ... I think the Fed will stay the course. But they could mention that the trade war (between China and the United States) could impact growth,” The Fed will conclude its two-day policy conference later today. It is expected to increase interest rates for the eighth time since late 2015. Investors are also counting on an added rate hike before year-end, though the prediction for 2019 is less clear.

Bitcoin sees red once more

The popular crypto coin Bitcoin drop by 2.15% yesterday, following a 1.87% drop on Monday, to close the day at $6,443.7, this is the 4th consecutive day in the red. Negative view over the cryptomarket weighed, with Monday’s late sell-off extending into Tuesday morning, Bitcoin dropped through the day’s first significant support level at $6,483.50 to a low $6,369.0. A late afternoon retracement found the popular coin going back through the day’s next major support level at $6,384.10 to an intraday low $6,329 before retraced back in the last hour. Adding to the negative feeling that has weighed on Bitcoin and the broader market, an exception was Ripple’s XRP. The news of Mt Gox’s bankruptcy trustee selling around 25,000 Bitcoin Cash and Bitcoins, which had been anticipated in the week’s prior.