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Trump threatens, Europe is withering, prices are falling

The main event that determined the dynamics in the financial markets yesterday was Trump's announcement that he was going to "end" US dependence on China. As an option for the practical implementation of the thesis, the threat to punish every American company that creates jobs abroad was voiced. And of course, us usual, tariff threats were declared.

Considering that the markets finished last week in a disassembled state (stock markets were falling, as well as oil prices), such statements only worsened the situation. As a result, the Fear Index jumped 15%, and the US stock market continued to form a correctional wave, which risks turning into full-fledged selloff and a bubble collapse.

Europe and Japan, meanwhile, reported results of the second quarter GDP revision. In both cases, the data were formally revised upwards, but overall the data confirmed that the economic situation in the second quarter was unprecedentedly bad.

In general, Europe is in a bad shape. The second wave of the pandemic, apparently, is set seriously with all the consequences for the Eurozone economy. So, perhaps, the ECB will not have to intervene in the dynamics of the euro, it will fall on its own. However, the risk of the ECB's interference in the fate of the euro will worry the FOREX participants until Thursday. So, it's not worth buying the euro yet.

Even against the British pound, which in the last week is desperately trying to discount the possible failure of negotiations with the EU and a "hard" Brexit. The British announcement that they are already preparing to exit without a trade agreement was made just before the start of the next round of negotiations. A great start for constructive negotiations.