FOREX TRADING STRATEGY AUG 3 - THE BEGINNING
August has come. Let's check out the latest news at the beginning of the month to know what forex trading strategies we should prepare.
Not only TikTok
US Secretary of State Michael Pompeo said the Trump administration would briefly announce countermeasures against a range of Chinese-owned software that were deemed to pose a national security risk. Comments suggest that the United States is likely to extend measures not just to TikTok - the music-video application owned by ByteDance - one of China's largest technology companies.
On Friday, President Donald Trump told reporters he intended to ban Tiktok from the United States, but his decision was not made public. The move implies that Microsoft is learning about app acquisition from ByteDance. Discussions about the acquisition were limping over the weekend. The South China Morning Post reported on Sunday: "ByteDance would rather turn away from video sharing than sell it to Microsoft."
Market in August
The US dollar was mixed in early Asia on Monday and the Australian dollar was lower. Stock market futures showed a quiet start to the session amidst a complicated complication of the Covid-19 epidemic. Futures on the S&P 500 index rose as the Asian session opened. The infection is recurring in some US states; a senior Federal Reserve official on Sunday called Congress to act to support Americans who were sacked by the pandemic and proposed a blockade. On Friday, US stocks extended gains from July amid rising technology stock prices and talked about a bailout package. Treasury bonds rose. Oil changed little and gold price went up.
The United States' major portfolio of 60% equity and 40% fixed income (bonds) has proved stable this year, but strategists are currently looking at alternatives to Government debt after some of the bond yields hit a historic low. Sanford C. Bernstein proposes to take more risks by backing stocks and gold, and argues that the negative correlation between stocks and bonds is likely to be broken. Morgan Stanley said corporate bonds could be the best replacement for government bonds to curb portfolio volatility and also provide an income level. A mix of stocks and bonds to balance the risk and reward ratio has been a key investment for decades, currently being tested by extremely low yields. Yields on 5-year Treasury notes fell to a record after the Fed launched a moderate policy of support for the US economy affected by coronavirus last week.
On Sunday, Australia's government in Australia declared a disaster after the coronavirus epidemic showed no sign of declining, three weeks after Melbourne's 5 million residents were ordered to stay home. The blockade will now take place across Australia's second most populous state and city residents will be subject to a curfew between 8pm and 5am. The new restrictions will take effect in six weeks and Australian Treasury Secretary Josh Frydenberg said the national economy is facing another important push.
In Asia, the Philippines is conducting a blockade in Manila and Indian Interior Minister Amit Shah said he tested positive for the virus. In the United States, infections in California have increased more than the 14-day average and the rate of infection in New Jersey has increased even further.