Wall Street set to build on the previous session’s positive price momentum over easing COVID-19 cues and impact from the 4th economic support bill.
Summary: The global financial market is experiencing a broad-based risk-on trading activity for the second consecutive session this week. News of COVID-19 victim count easing across major global hotbeds continues to fuel positive price activity surrounding risk assets in the global market.
European market saw major indices and equities trading with clear positive bias while the German market saw key indices and equities scale fresh monthly highs led by broad market risk on sentiment fuelled the rally. The risk sentiment is fuelled by the latest reports from Italy, Spain, and the USA – three major COVID-19 hotbeds reporting a decline in their new victim count and deal toll count. However, gains were capped over concerns of more economic outlook woes in the immediate and foreseeable future.
Precious Metals: Rare metals continue to see steady fund inflow despite improvement in broad market risk sentiment. The ultra-low interest rates of bonds have caused fund flow direction to changes in the market, causing the price of gold to scale fresh multi-year highs today.
Crude Oil: Crude Oil price traded positive in the global market today as hopes for a possible supply cut agreement during the upcoming OPEC + teleconference meeting later this week improved support of oil bulls. US weekly stockpile count also remains in focus, but demand to supply outlook remains in favor of Oil bulls at the moment.
DXY: US Dollar index declined below 100 mark as the US government went live with its fourth economic support bill yesterday. This, along with declining COVID-19 victim count, which improved risk sentiment, also affected demand for USD resulting in a clear decline against six major global currencies.
Trading Perspective: Equity markets are enjoying a clear bullish price rally after quite some time as COVID-19 shows signs of peaking in major hotbeds. However, there are still other concerns that have come into focus, such as Crude oil supply and demand dynamics and economic outlook of major global economies, which keep gains of key risk assets capped in the immediate future. In the immediate future, traders await meeting between OPEC+ members including Russia later this week and a meeting of G20 energy set to take place on Friday, aside from participation of Norway suggesting that price action of risk assets are likely to remain trapped within familiar price range regardless of improved risk sentiment.
Trading Perspective: Wall Street is set to see major stocks and indices open positive as the 4th US government support package went life, while virus victims are also seemingly declining. US futures trading in the international market saw positive activity while cues from Asian and European markets also support the bullish opening of major US instruments today.
EUR/USD: The pair is trading with clear positive directional bias and has managed to gain a steady foothold above 1.08 handle building upon momentum from the previous session. A decline in USD’s strength helped pair scale 1.09 handle, but Euro’s fundamental weakness resulted in pair declining below 1.09 handle. Traders now await US Jolts Job openings data for short term profit opportunities.
GBP/USD: The pair is trading positive above 1.23 handle as GBP bulls have managed to largely shield themselves to news of PM’s Johnson’s hospitalization. USD’s slight decline in the global market today added momentum to GBP bulls, but concerns on Brexit proceedings and UK Covid-19 woes kept gains in check. Traders now await US data for short term profit opportunities.
USD/CAD: The pair is trading with clear dovish bias as USD lost strength on improved risk sentiment and impact of US government making its 4th economic support package live yesterday. Improvement in crude oil price action also strengthened CAD bulls resulting in the pair seeing a 2% decline during intra-day activity. Traders now await US API weekly stockpile data, Jolts Job Openings, and Canadian Ivey PMI for short term profit opportunities.