During the night, the minutes of the September meeting of the Australian Reserve Bank (RBA) was published. RBA sees no reason to change interest rates in the near future. The next move will probably be a hike, provided that the economy develops in a satisfactory direction. Trade tension is currently the largest global risk for the Australian economy. In addition, during the meeting, the possibility of a crisis in developing countries was discussed, with particular emphasis on Turkey and Argentina.
Donald Trump imposed a new duty on Chinese goods, which we were informed about shortly after the announcement of this decision. The US president also threatened that if China makes retaliation, it will not hesitate before the next tariffs, this time for imports worth 275 billion USD. So far, all comments from the Middle Kingdom are moderate, no steps were taken in connection with the decision of the American president. The Chinese Minister of Trade said that the government is confident of achieving the economic goals set for this year. In his opinion, there can not be a winner in a trade war. Trade protectionism of the United States will hit both countries and will also affect the whole world. In his opinion, the only option is cooperation between economic giants.
Let's now take a look at the SP500 technical picture after the news was published. The market is now trading close to the all-time high at the level of 291.72, but the Doji candle is signaling a possible pull-back from the top. Moreover, there is a clear bearish divergence forming between the price and the momentum indicator, and the market conditions are now close to neutral. In case of a deeper pullback, the nearest technical support is seen at the level of 289.95 and 289.02.
