As bullish relief from trade truce faded, concerns of economic slowdown gripped investors once again. US Wall Street is likely to see dovish price action on headlines influenced momentum.
Summary: Global market is seeing major benchmark indices and equities lose steam and slow down its bullish price rally in both Asian and European markets. While the trade war between the US and China has come to true yet again, the possibility of two nations coming to an agreement on trade deal still looms far away which has brought back investors concerns surrounding slowdown in the global economy back to the forefront. The longer the trade war extends, the higher the loss is for major economies across the globe, and this has caused traders to resume their cautious stance towards trading practices.
European market saw major stocks and indices manage to see some gains earlier in the day, but gains were capped as cautions investor sentiment hurt caused bulls to lose strength. In the Forex market, price action continues to remain mixed, but major global currencies see some gain as US Dollar weakened in the global market slightly.
Precious Metals: Precious metals are seeing mixed activity in the global market. While prevalent risk aversion influenced by waning influence from trade truce update and weakening USD boosted gold price action in the global market, silver traded in red well in bear’s territory.
Crude Oil: Crude oil price declining in the global market has increased concerns of a slowdown in the global economy messed with investors’ expectations of demand in crude oil in the global market. Despite OPEC extending supply cut and Middle Eastern tensions, a change in supply-demand ratio favoured crude oil bears.
AUD/USD: The pair is trading positive today as investors choose to ignore the rate cut by RBA. Australian dollar received further positive support in the form of weakening USD which helped the pair retain most of the intra-day gains and hold steady near the 0.70 handle across European market hours.
On The Lookout: Geo-political woes remain at the center of investor focus. While trade truce update brought in a fresh wave of positive price rally, it failed to have a lasting impact. The price of risk assets saw range bound action with little gains as caution gripped global investors capping possibility for further gains given waning influence from trade war update. Be it Middle Eastern tensions, Brexit or Sino-U.S. trade war – none of the major events have seen any considerable progress over the course of the last few weeks. As the global economy is likely to suffer, the longer these issues extend, bearish long term bets are on the rise and short term trades based on news-driven momentum directs the price action in immediate and near future trading sessions. On the release front, the macro calendar is silent for the US, while the Canadian calendar sees the release of RBC manufacturing PMI data. Aside from macro data updates, traders await a speech from BOE Governor Mark Carney and FOMC member Mester.
Trading Perspective: US stock and benchmark index futures trading in the international market saw dovish price action as trade truce update influenced rally began to lose steam in the global market today. Further, news that US agriculture sector, especially meat producers and exporters are suffering loss worth hundreds of millions of USD owing to trade war with China and Mexico also hurt investor sentiment suggesting that Wall Street is likely to see dovish price action today.
EUR/USD: The pair is seeing positive price action in the global market as reports from European central bank hinting at the decision to refrain from rate cuts boosted market bulls. Further, USD weakened in the global market today adding support to Euro bulls. Traders now await market updates from the US for short term profit opportunities.
GBP/USD: The British Pound continues to trade in red for a second consecutive trading session this week. British Pound which has already been suffering sharp declines saw further dovish influence and pressure weigh down the pair on yet another release of dovish macro data from the UK. Traders now await market updates from the US for short term profit opportunities.
USD/CAD: The pair is trading with dovish bias as USD weakened on concerns of economic slowdown and waning influence from trade war woes. However, declining crude oil price weighed down Loonie, helping USD see limited declines. Traders now await Canadian macro data and general market updates for short term profit opportunities.
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