The bullish rally in stock markets | 24 July 2020

The bullish rally in stock markets


#DAX30:


ECB will continue purchases under the pandemic emergency purchase programme with a total envelope of €1,350 billion. These purchases contribute to easing the overall monetary policy stance, thereby helping to offset the pandemic-related downward shift in the projected path of inflation. ECB will reinvest the principal payments from maturing securities purchased under the PEPP until at least the end of 2022. European central bank will also continue to provide ample liquidity through refinancing operations. This is a positive signal for the German stock market!


Trading recommendation: Buy 12858 and take profit 13050


The bullish rally in stock markets


#SP500:


The US Treasury repays bonds worth $ 45 billion on Tuesday, which will positively affect the value of the European currency. The inflow of dollar liquidity into the financial system always has a positive signal for the stock market. The Federal Reserve cancels REPO auctions for nine consecutive days due to the lack of applications for dollar loans from commercial banks. Such dynamics indicate the absence of problems with dollar liquidity among bankers, which will positively affect the US stock market. Additional liquidity forces investors to increase their long positions.


Trading recommendation: Buy 3198 and take profit 3255.


The bullish rally in stock markets


#Lukoil:


OPEC and its Russia-led allies agreed to lift some of those output restrictions, saying that the world’s demand for oil is beginning to recover. Starting in August, the countries will ease their collective output cuts to 7.7 million barrels per day, from the previous 9.7 million b/d that took effect in May, according to reports of the virtual meeting where OPEC delegates deliberated. The producer alliance plans to ratchet back output cuts further to 5.8 million b/d between January 2021 and April 2022. This factor will have a positive impact on LUKOIL's revenue.


Trading recommendation: Buy 4900 and take profit 4990

 

David Johnson
Analyst of «FreshForex» company
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