By the end of this month, there were two main topics in the markets that fully affect the mood of investors. This is, of course, a situation related to the exit of economically developed countries from strict quarantine measures, and the aggravation of the political and economic confrontation between Washington and Beijing.

These two important topics have been repeatedly mentioned in articles earlier, and the mechanisms of their influence on the market activity of investors are described in detail. In fact, these are two oppositely directed flows of news and events that have a mutually compensating effect on financial markets. They alternately prevail over each other, which is the reason for the growth in demand for risky assets and its pullback. It is also these factors that are the main reason for the overall lateral dynamics in the currency market, as was previously mentioned several times.

This week began on a positive note. Markets are more and more positive about the process of lifting quarantine measures of economically strong countries, which gradually revives economic activity and encourages investors to buy shares in companies. Yes, of course, there are still many questions to whether there will be a second wave of a pandemic. But will business and production, as well as social activity lead to this? There are more questions than answers. Investors are thinking of buying on possible positive changes in the future, which is the reason for the growth in demand for risky assets, not only for stocks of companies, but also for commodity and raw material assets.

Now, regarding the second very important problem - the confrontation between the United States and China. It can be noted that so far it is in a phase of tough rhetoric. It may remain so before a tough election campaign between D. Trump and his opponents from the Democratic Party. If lifting quarantine in the United States turns out to be positive and there will not be a new big wave of infections and death among the electorate, then the president can soften the rhetoric, all the more so as a tense economic war and political confrontation can have a strong negative impact on the ability of the States to overcome the pandemic crisis. Therefore, we believe that so far the markets keep this probability in mind, but first of all, they evaluate the incoming positive news about quitting one country after another.

Given such market sentiment, we believe that the stock markets will receive significant support today, commodity and commodity assets will be in demand, and the US dollar will remain under local pressure.

Forecast of the day:

The USD/CAD pair remains in a wide side range of 1.3860-1.4245. At the same time, rising oil prices in the wake of rising demand for risky assets will exert local pressure on the pair. We expect it to decline to the lower boundary of this range.