Observing the dynamics of world markets, we can say that the advance optimism of investors, which filled the end of March and the whole of April, completely disappeared

Investors focused on the expected measures at the end of March and the whole month of April to reduce the rigidity of quarantines. And this was the main reason for the strong pullback of stock indices around the world, the weakening of the US dollar. In this situation, the markets were even slightly interested in the expectedly bad first quarter economic data. But as soon as epidemiologists started talking about the high probability of repeated outbreaks of infection, which were confirmed by individual facts from the Asian region, as well as from Europe, the focus of sentiment instantly shifted in this direction.

But what you should pay attention to is the fears associated with the probability of a widespread second wave of the pandemic, which are still expressed only in the reluctance to buy risky assets. Investors are not selling them, and it seems that they are just waiting, watching the development of events.

In addition, the wait-and-see attitude is explained by the expectation by the markets of the Fed Chairman J. Powell's speech, which will take place today. Earlier this week, a number of members of the Federal Reserve expressed their views on the situation in the American economy, the consequences of the radical measures taken earlier by the regulator to support it. In general, they continue to regard its current plight as temporary. For example, Fed's President of Richmond, T. Barkin said that he expects significant economic growth in the third quarter of this year. In turn, L. Mester, president of the Cleveland Federal Reserve Bank, was not so optimistic, but noted that the second quarter would be decisive in the state of the economy when quarantine restrictions were lifted. At the same time, Minneapolis Federal Reserve Bank President N. Kashkari said he is opposed to negative interest rates, which had a positive impact on the yield of treasuries.

But, of course, the speech of the head of the Federal Reserve, J. Powell, which is supposed to take place today, will be more important. Investors expect him not only to comment on the current situation in America's economy, but also his opinion on the prospects for interest rates. It can be recalled that on Tuesday, D. Trump pushed the Fed again to accept negative interest rates. This caused a drop in demand for risky assets, as investors chose to take a wait-and-see attitude until it became clear what Powell was thinking.

In the currency market, activity in connection with the speech of the head of the Fed has fallen noticeably. The ICE dollar index is consolidating in a narrow range, and at the time of writing, it is at exactly 100 points. We believe that his words that there is no need to cut interest rates to negative values yet, that despite all negative phenomena, the country's economy will survive and that he forecasts it's more active recovery in the second half of this year, will have a noticeable positive impact on demand for risky assets. In this case, the US dollar will be under local pressure, gold will turn down, and high-yielding currencies - the Australian dollar and Canadian dollar will receive support. Also, the dollar's decline will support the exchange rate of the euro and pound.

Forecast of the day:

GBP/USD found support at 1.2250. Some better statistics, released today, as well as possible negativity from Powell's speech for the dollar, may push the pair to local growth to 1.2365.

Gold on the spot is hammered into a triangle amid multidirectional signals about the prospects of the global economy. If Powell's speech is positive, then gold quotes may decline by 1680.00, breaking above the level of 1695.50.