Russia and China sending a message to the west

Daily Analysis - 18/09/2019

Military exercises include Russia China and India

China, India Pakistan and Russia are conducting a set of military exercises. According to experts, Russia is trying to deliver a strong message to the West and especially the U.S.

The army exercises are conducted every year however Russia has decided this year to call troops from India, China, and Pakistan (as well as Kyrgyzstan Kazakhstan, Uzbekistan, and Tajikistan) to join the exercises. According to the Russian defense ministry, the drills will include more than 127,000 military staff. The military equipment and weapons that are going to be used are around 20,000 and about 15 ships and 600 aircraft.

U.S stocks gently improve

On Tuesday the U.S. stocks gently improved. However, profits remained limited while the Federal Reserve starts a two-day monetary policy discussion. The S&P 500 rose 0.3% to finish at 3,005.68. The Nasdaq Composite improved 0.4% to close the day at 8,186.01. The Dow Jones Industrial Average advanced 33.97 points to 27,110.79.

The meeting is programmed to end today when the central bank is supposed to publish its latest decision covering the monetary policy. The Fed is widely anticipated to lower rates by 25 basis points. That would be the second rate cut for the year.

Gold remains in a range

The popular safe haven Gold was consolidating today due to cautious sentiment while traders anticipated signs from the U.S. central bank’s position on monetary policy. A surprise decline in crude rates depressed the demand for the safe-haven metal for now. Saudi Arabia attempted to convince the markets following the attack last Saturday by announcing that full production would be returned by September's end. U.S. gold futures fell 0.2% to $1,510.68 per ounce. The Spot gold was hardly exchanged at $1,502.69 per ounce.

Saudi Arabia said it will restore full oil production

On Wednesday Oil fell, continuing to lose from the previous day following Saudi Arabia’s announcement that the Kingdom will restore the suspended oil production by the end of September.

However, traders continued to be wary regarding the Middle East's tension following the United States announcement that it considers the probability that the attacks that paralyzed Saudi Arabian oil plants last weekend began in southwestern Iran. Iran has rejected the accusations regarding the strikes. On Tuesday. U.S. West Texas Intermediate (WTI) crude futures dipped 35 cents to $58.98 a barrel.

Brent crude oil futures dropped 15 cents, to $64.39 a barrel.