European stock markets followed their Asian counterparts on Monday as the US economy returns in sight, in particular, the fate of the tax reform.
Gold is rising against the backdrop of increased risks before the resumption of discussion of the tax reform in the Senate. The asset has risen in price by 0.5% to $ 1.293 and looks determined to reach the $1,300 mark.
Traders record profits on WTI on Monday after a significant increase in quotations last week thanks to declining supplies to the US market from the Canadian provinces. Uncertainty surrounding the outcome of OPEC rally which will be held on Thursday also forced investors to cut long positions on black gold. The current head of the Federal Reserve, Janet Yellen will address the Joint Economic Committee in Washington on Thursday, which is worth paying attention for Dollar bulls which are losing their grip on the American currency. Also, this week, hearings will be held on the appointment of Jeremy Powell, the successor to Yellen, who defends the position of further deregulation and a more modest pace of tightening of monetary policy. On the economic front, data on consumer confidence in the United States, the trade balance and the assessment of industry and unemployment from ISM can be of interest.
The Dollar index fell sharply to the level of 92.60 and is set for a further fall, as doubts about the tax reform are becoming the main theme of market sentiments. EUR/USD is growing steadily to reach 1.20, despite warnings from ECB officials last week that the economy still requires significant credit incentives. However, almost all the macroeconomic statistics of the eurozone exceed expectations, including key leading indicators, such as business sentiments and consumer confidence. The US currency is losing more and more against defensive assets, such as the Japanese Yen, the Franc and XAU/USD, which indicates an increase in concerns over the resolution of major uncertainties, such as tax reform and the OPEC decision on Thursday to extend production quotas. Brent slightly increased, serious attempts to continue growth are not expected before the decision of the cartel on Thursday.