Week marked by trade negotiations between the US and China

Stock markets are trading aimlessly on Monday after macro data showed that the US unemployment rate fell to its lowest level in almost 50 years, easing fears of a slowdown in the world’s largest economy.

Wall Street optimistically celebrated the latest monthly employment report in the US, after learning that 136,000 jobs had been created in September, and that the unemployment rate fell to 3.5%, its lowest level since December 1969.

The employment report last Friday was strong enough to mitigate fears of a recession, but kept alive the hope that the Federal Reserve will remain firm in its stance to cut interest rates at the end of the month.

The sentiment on the US economy deteriorated sharply last week after disappointing data on manufacturing and services, which showed that the trade war was impacting the economy and that higher rate cuts will be necessary to avoid a possible recession.

This week, the focus will be on high-level trade negotiations between the United States and China that will be held in Washington between October 10 and 11, to try to end a blunt 15-month trade war, which has affected global economic growth and has increased the risk of a worldwide recession.

The latest information indicates that China will not be willing to negotiate a number of key aspects. Deputy Prime Minister Liu He said this weekend that his offer to the United States will not include the reform of Chinese industrial policy or government subsidies, one of the main demands of the Trump administration in the negotiations.

Investor attention will also be fixed in Brexit, after French President Emmanuel Macron said that negotiations should be concluded later this week. While the British Prime Minister, Boris Johnson, insisted this Sunday on his intention for the United Kingdom to leave the European Union on October 31.

Morgan Stanley’s selective group of Asia-Pacific shares closed the session with an advance of 0.09% at $614, while Japan’s Nikkei 225 fell 0.16% to 21,375 points. The Chinese markets remained closed for the celebration of their national day and will quote the latest news from tomorrow.

The main Wall Street indexes registered strong increases last Friday thanks to the historical employment data of the USA. The Dow Jones advanced 1.42% to 26,573 integers, the selective S&P 500 rose 1.42% to 2,952, and the Nasdaq market composite index closed with a 1.40% increase up to 7,982 units.

Europe has started the week with slight falls that reach 0.09% in the DAX 30 in Frankfurt, 0.06% in the FTSE 100 in London, 0.21% in the CAC 40 in Paris and 0.20 % in the FTSE MIB of Milan. The Euro Stoxx 50 falls 0.06% to 3,445 points, and the Ibex 35 loses 0.18% to 9,845 integers.

In the Forex market, the dollar index trades with a moderate advance that has placed it at 98.60 points. Against the yen, the US currency rose slightly in the Asian session to 106.90 yen. The euro is currently trading at $1.0973, while the British pound is trading at $1.23.

In the commodity markets, Texas WTI light oil rose 0.7% to $52.81 per barrel, while the price of spot gold fell to $1,502 per ounce.

In the WTI daily chart, we observe that the price of crude oil is approaching the lower part of the lateral range in which it has been trading since April, due to concerns about the global economy and the signs of an excess supply in the oil markets.

On the macroeconomic front, attention will be focused on the publication of factory orders from Germany, the investor confidence of the euro zone and the consumer credit figures of the United States.


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