Boeing production resumption, successful COVID-19 experimental drug updates help improve risk sentiment.
Summary: Global equities and major indices are seeing positive price action in the market today as updates from across the globe hint at key economies slowly planning to reopen their market with the US being the latest to join the fray. In Asian market hours, all key indices recorded positive price action across the day, but gains were capped on account of disappointing Chinese GDP data, which recorded the first-ever decline in Q1 readings to date.
But EOD saw major indices still remain above green mark indicating level on improvement to broad market risk sentiment. Following positive cues from Asian markets and comments from US President Trump yesterday over plans to slowly reopen the US economy, the European market saw major indices and key equities post considerable gains in trading session today paving the way for second weekly gains.
Rare Metals: Precious metals finally saw a sharp blow in the global market as risk appetite improved leaps and bounds over the latest headlines influenced cues. Reports of US firm having a high success rate for its experimental drug in dealing with COVID-19 and Trump’s 3-stage plan to reopen economy are major factors contributing to risk sentiment in the market today.
Crude Oil: Crude oil futures continue to remain trading with mixed momentum in the global market. US stockpiles continue to grow with each passing week, and IMF’s glut warning also came as a major blow. But given recent favorable developments in economic activity, Brent futures have turned positive while WTI futures continue to trade below $20 on impact from stockpile build-up updates.
DXY: US Dollar index remains mostly flat, having slightly declined from previous session highs in the early trading session. As risk sentiment improved in the market and the US President revealed plans for reopening the economy, USD lost its strength from safe-haven status, but lingering caution keeps index above the 99 mark.
On The Lookout: The major focus today is on updates surrounding the US pharmaceutical firm Gilead, having managed to acquire success with the COVID-19 experimental drug. Gilead Sciences Inc, a NASDAQ listed firm, published a media report stating that its experimental drug had a positive response on patients with severe symptoms of COVID-19.
Given that this announcement followed President Trump’s update for a 3-stage process of slowly reopening the US economy, the risk sentiment has considerably improved in the market today. It should, however, be noted that President Trump’s plans are mostly guideline recommendations and actual decisions have still been left in the hands of governors of respective states.
On the release front, the macro calendar schedule remains silent for both Canada and the USA, which suggests broad market headlines and consumer sentiment-driven price momentum will dominate market activity in North American market hours today.
Trading Perspective: Wall Street is set to open positive, given positive support from several favorable updates. Aside from the two major proceedings mentioned above, there were also reports that Boeing is planning on resuming the production of commercial jets next week. Broad-based positives cues from the international market and positive price action of US futures in the international market also support the positive market opening of Wall Street instruments later today.
EUR/USD: The pair is seeing positive price action today, albeit trapped within a familiar price range. Given the fact that USD lost some of its strength and EURO managed to hold steady above 1.08 handle in the previous session, the price has moved above mid-1.08 handle post, which it has entered consolidative pattern around the 1.0885 handle. The pair is unlikely to scale 1.09 handle in the NA session but is highly likely to remain above 1.085 level for the rest of the day.
GBP/USD: The pair similar to EURO managed to take advantage of USD’s weakness and built a positive price rally today. However, it has lost most of its intra-day gains and is currently back below 1.25 handle with a strong supply around the 1.2490 handle in the immediate future. As the trading session comes to close for the week, GBP is likely to make repeated attempts at scaling 1.25 handle albeit slim chances for the same given lack of strength in Pound bulls.
USD/CAD: The pair has finally moved back below 1.41 handle as improvement in broad market risk sentiment and the possible reopening of major global economies improved crude oil consumption outlook. USD’s own loss of recent gains also aided in CAD’s recovery, but the pair still holds firm above 1.40 handle and is range-bound near 1.405 level as Crude oil price remains mixed in the international market. The pair is all set to close for the week in 1.40 handle with weekend proceedings likely to dictate directional bias when trading session resumes next week.
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