Dollar doubts, strategists, hurricanes and vaccine hopes

25 авг. 2020 г.

Yesterday was not very rich in both important events and any pronounced price movements in the financial markets.

The dollar, which was weak during the European session, began to recover during the American one. But in the end, any additional clarity in its dynamics did not appear. In this regard, there are some hopes for a speech by Fed Chairman Jerome Powell at the annual symposium in Jackson Hole. Before that, while the Dollar Index has not left the range of 92.50-93.70, we do not expect for any local trend.

Plus the factor of the outcome of the US elections will increase the entropy around the dollar. Most of the market strategists polled by CNBC (14 out of 20) predict a victory for Biden. At the same time, half of them believe that Biden's victory will provoke a fall in the US stock market. According to experts, Trump's victory will give a positive impetus to the stock market.

But these are questions of perspective. Here and now the stock markets continue to show growth, and some indices, such as the high-tech Nasdaq, demonstrate historical highs every day. As an informational trigger, vaccine news and their accelerated approval by regulators (when all the necessary tests will be passed) are used.

Recall that in the most optimistic scenarios, we are still talking about months before the appearance of the first limited batches of vaccines, so nothing will change here and now. At the same time the total number of cases in the world will exceed 24 million very soon.

In the oil market, news about hurricanes on the coast of the Gulf of Mexico and information that a number of companies have stopped production and processing of oil in connection with this threat, provoked an increase in "black gold" prices. But for now, we would consider this only as a reason for better “sell” entry points.

Overall, the situation in the oil market continues to be on the side of sellers, since demand is not recovering as quickly as experts expected, and the growth in the number of cases in the Eurozone and a number of other countries raises serious concerns about the future prospects for oil demand. Against this background, the number of active oil rigs in the United States started to grow, that is, American shale producers are beginning to recover, which means an increase in oil supply in the foreseeable future.