Chinese GDP data helped ease growth worries in China, influencing a wave of bullish trend price action in the global market. EU-U.S. trade talks headlines also favors market bulls. US data in focus.
Summary: Global equities continued to trade with a positive bias in the last trading session of the week. Data and headlines driven momentum underpins market bulls resulting in solid gains in major risk assets. While Chinese GDP did drop compared to the previous year, the data is viewed by analysts as a sign that the impact from the 18-month long trade war is starting to ease up providing a positive growth outlook for the Chinese economy in the year ahead.
European markets took cues from Wall St and the Asian market and opened on a positive note. Shortly after positive opening key stocks and major indices scaled fresh record highs as comments from EU’s Hogan hinting at positive progress in trade-related talks with the US came as much welcomed follow up to recent developments in Sino-U.S. trade deal. In forex markets, major currency pairs traded range-bound as USD held firm in the global market supported by recent positive macro data outcome.
Precious Metals: Rare metal price saw a sharp slide in price action as risk sentiment in the global market skyrocketed over macro data and headlines-driven price action. Further, USD in which the metals were denominated also saw a sharp spike in value resulting in dovish price action for safe-haven metals.
Crude Oil: Crude oil price traded positive and saw some level of gains. But the upside was mostly limited as concerns over demand for crude oil from China spiked on Chinese GDP data outcome. However, optimism from trade deal and positive signs on the EU-US trade deal helped crude oil bulls retain its gains.
AUD/USD: The pair today saw mostly neutral price action as Chinese GDP data outcome and firm USD in the global market put pressure on AUD bulls. However, USD failed to create a breakout as broad-based risk appetite underpinned AUD bulls preventing sharp meltdown in the price to the downside.
On The Lookout: As the trading session comes to close for the week, there isn’t much to look out for in the North American trading session aside from macro data updates. Major geopolitical events of the week have come to pass and the outcome of said events was well in support of positive global economic growth.
On the macroeconomic calendar front, the US market sees the release of JOLTS Job Openings data, Industrial & Manufacturing production, Preliminary Michigan Consumer Sentiment/current conditions/inflation expectations data, Building permits data, Housing Starts data and speech from Fed members Quarles and Harker in North American market hours.
Trading Perspective: Wall Street futures trading in international market scaled record highs on Chinese data-led cues and headlines hinting at a positive start for EU-U.S. trade talks. While positive cues from allied international market and activity of US assets suggest Wall Street is set to see positive opening and price action, the outcome of US Job openings data and preliminary Michigan data will provide cues that will help cement directional bias for the short term.
EUR/USD: The pair traded positive earlier in the day on news of positive start for EU-U.S. trade talks and broad-based risk sentiment. But gains were capped as USD held steady which resulting in pair failing to break past the mid-1.11 handle. Traders now await US data for short term profit opportunities.
GBP/USD: The pair opened for the day on a relatively neutral note, but soon gave up on upside move and directional bias shifted in favor of USD as UK retail sales data was highly disappointing. Further, firm USD in the global market added pressure to GBP bulls resulting in today’s decline. Traders now await US data for short term profit opportunities.
USD/CAD: The pair is trading with bias in favor of Loonie despite firm USD in the global market. Broad-based risk on market mood and positive crude oil price in the global market provided commodity-linked currency Canadian Loonie with fundamental support. But neither lacked the strength to create a decisive change in directional price momentum resulting in consolidation near weekly lows. Traders now await US data for short term profit opportunities.
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