Easing death toll counts improved economic outlook and provided the market with improved risk sentiment.
Summary: Global equities are seeing positive price action on the first trading session of the week as news of declining COVID-19 related death count made headlines. Both France and Italy showed improvement from lockdown measures in the form of declining death toll updates, which made headlines at the weekend.
This, along with news that New York one of the major hotbeds for COVID-19 outbreak seeing a decline in virus victim death toll count came as a major improvement to investor sentiment, also helping improve the economic outlook. The forex market is also seeing range-bound activity as USD holds firm despite visible improvement to risk sentiment. However, major global currencies are trading with clear improvement to their fundamental support with several currencies showing clear positive price momentum in Asian and European market hours today.
Precious Metals: Rare metals continue to trade positive despite clear improvement to investor risk sentiment. The demand for safe-haven assets stems from investor reluctance to give up caution over headlines as they await more concrete proof of COVID-19 peaking before making any major critical changes to their investment pattern.
Crude Oil: Crude Oil saw both WTI and Brent futures and indices lose some of their gains made on Friday. However, the price still holds steady above $25 per barrel for now. As there were no signs of rumored peace talks materializing between Saudi Arabia & Russia or OPEC + members making sudden sharp changes to crude oil output, the momentum from last week seems to have evaporated over the weekend.
DXY: The USD index, which measures the strength of US Greenback against six major global currencies, is moving flat in the global market today. While broad market safe-haven demand remains high, keeping index steady above 100.68 marks, improvement in risk sentiment across major markets, and easing death toll count weighed down USD, resulting in price staying at neutral range.
Trading Perspective: Crude oil bulls lost momentum as promised support from the US failed to materialize, resulting in neither Saudi Arabia nor Russia making major changes to their stance. A condition for OPEC+ and Russia to make changes to their product and output levels involves concrete decisions from the USA on its own product and output volumes. But the discussion with US Oil industry heavyweights and President Trump failed to provide any such outcome resulting in peace talks failing to materialize.
While the global COVID-19 outbreak and the death toll seems to be peaking, the same can’t be said for the USA. Despite signs of a slowdown in the death toll of COVID-19 victims in New York, other major hotbeds continue to see victim count escalating while there is also President Trump’s warnings, which hint at the possible escalation in victim count over the next two weeks. This suggests that Wall Street is likely to see relatively dovish activity the week ahead unless other major US hot zones show signs of a slowdown in victim and death toll count.
Trading Perspective: Led by broad-based investor sentiment, both forex and equity markets are likely to see clear bullish activity in early North American market hours. Cues from the international market are one of the supporting factors. At the same time, US futures which traded positive in the international market is also a sign which suggests Wall Street is set to see the positive opening of its major indices and risk assets.
EUR/USD: The pair is trading flat in the global market today, oscillating in a familiar price range between 1.0795 to 1.0840. While both currencies remain, the firm supported by improvement in risk sentiment and lingering caution in the market, neither poses the strength to make a rebound suggesting a deadlock is likely to remain unbroken during American market hours.
GBP/USD: The pair is trading positively supported by broad market risk sentiment, but gains are capped owing to cues from disappointing macro data and news of PM Boris Johnson being hospitalized. Firm USD also adds pressure keeping price trapped below mid-1.23 handle for the foreseeable future.
USD/CAD: The pair is trading with clear dovish bias as USD showed signs of easing despite holding firm overall in the global market. CAD remains supported by broad market risk sentiment and crude oil price retaining hold above $25 handle. Traders await fresh cues from US market hours for short term profit opportunities.
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