Global growth concerns affect save-heaven assets

Daily Analysis - 28/12/2018

Swiss franc and Yen getting stronger

On Friday the safe-haven assets yen and the Swiss franc rose while investors found an opportunity over the resumed U.S.-China trade tensions ease and weaker economic data. Now those two facts helped improving global growth fears.

On Thursday the popular news agency Reuters stated that President Trump's administration was thinking an executive rule in 2019 to declare a “nation emergency” that could block U.S. companies from using goods made by ZTE and Huawei Technologies. Trade anxiety among the world's two biggest economies it’s one of 2018 greatest risk factors. But both now agreed to a 3-month "peace" regards to their tariff fight while they are trying to establish a permanent deal. Today in Asian trade session the yen scored 0.4% versus the greenback, while the Swiss franc nailed 0.3% while resumed growth concerns drove traders back into safe havens assets.

Oil prices jumped but fears for oversupply still here

On Friday Oil prices rose about 3% and got back the profits they lost in the previous trading session. But the increases in U.S. crude stock and the continuing anxieties regarding the global economy held markets under stress. The U.S. West Texas Intermediate (WTI) was at $45.60 a barrel, about $1.01 up. On Thursday went down 3.4%. Brent crude went up more than 2 %, at $53.34 a barrel it dropped $2.30 the day before to end at about $52.15 per barrel.

Gold rises on the demand for save heaven assets

On Thursday Gold went up supported by a softer dollar while that was the underline factor that drove investors to the safe-haven metal.

U.S. gold futures ended up at $8.09 while the Spot gold was up 0.6% at $1,274.49 per ounce after touching the $1,279.06 level in the previous session. Jim Wyckoff, senior analyst at Kitco Metals said

"The weaker dollar index is supporting the buying interest in gold and the U.S. stock indexes have pulled back significantly, which has also helped,"

And added, "Also, the technical posture of the gold market has become significantly bullish on a near-term basis, which is inviting some chart-based buying too."

European markets retrace back

The popular Euro Stoxx 600 index was up more than 0.5% with all the main sectors appearing in the bullish region. Primary resources equities drove the profits following a surge in Chinese stocks last night while concerns over a US-China trade war soften. In 2018 the continuing conflict among the two biggest economies in the world has knocked the global stock markets down. On Thursday, the DAX closed down 2.4%.

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