TOPICS MENTIONED IN THIS MARKET BRIEFING:

• European stock markets give ground after PMI
• Wall Street supported by reassuring indicators
• Chart of the day – GBP/USD: a double top

EUROPEAN STOCK EXCHANGES SAVE GROUND AFTER PMIs

European stock markets ended in the red on Friday after signs of a slowdown in economic activity in the eurozone, adding to recent doubts about the pace of the recovery.

Early results from IHS Markit's monthly Purchasing Managers Survey (PMI) were worse than expected as the eurozone economic rebound showed signs of weakness in August. In France, activity in the manufacturing sector contracted, with the sector's PMI falling to 49.0.

European markets, however, reduced their losses after the publication of the United States "flash" PMI, which shows that the growth of private sector activity has risen to its highest level since the beginning of 2019.

Thus, the CAC 40 index lost 0.30% to 4,896.33 points. The Footsie fell 0.19% and the DAX 30 fell 0.51%.

However this morning, hopes for a cure are boosting the markets. US President Donald Trump announced on Sunday evening the emergency authorization of the transfusion of blood plasma from people cured of coronavirus to hospitalized patients.

WALL STREET SUPPORTED BY REASSURING INDICATORS

Wall Street ended higher on Friday and the Nasdaq again set a record, Wall Street welcoming indicators deemed reassuring on the recovery of the economy after the shock of the coronavirus while Apple continued to soar.

Growth in private sector activity in the United States returned to its level of early 2019 in August thanks to a recovery in new orders in both industry and services, according to the first results of the monthly surveys of business managers. Purchasing (PMI) from the IHS Markit Institute.

At the same time, home sales recorded a record increase in July and posted their highest annualized rate for almost 14 years according to statistics from the National Association of Realtors (NAR), the main federation of real estate agents in the country.

These better than expected figures have been well received on the financial markets after a series of mixed indicators in recent days, with among other things unemployment claims rising again, to more than a million last week.

Consequently, the Dow Jones, took 0.69% to 27,930.33 points. The Nasdaq advanced 0.42% and the S&P-500 gained 0.34%.

Otherpoints on the news of the financial markets

• FOREX

The euro fell to a low of more than a week, at 1.1753 dollars, after disappointing PMIs in the eurozone and those above expectations in the United States. The greenback took the opportunity to recover 0.54% against to a basket of reference currencies.

• Oil

Oil prices lost more than 2%, to 43.7 dollars for a barrel of Brent and 41.6 dollars for American light crude oil WTI.

Today's economic calendar:

CHART OF THE DAY – GBP/USD: A DOUBLE TOP

The pound sterling fell against the dollar, affected by the lack of major progress between the European Union and Great Britain on their future relationship at the end of the post-Brexit transition period.

On this 4-hour chart, prices are trying to validate a double top, this reversal chart pattern could lead to a correction towards 1.2915 in the event of a break of the neck line at $1.3080.

Moreover, on the daily time frame, we can also see that the RSI indicator has confirmed a bearish divergence, thus several technical elements plead for a corrective movement to come.