Harry Xu

Equities Wobble on Fresh Virus Outbreak Cues, Wall Street to Open Mixed

Summary: Equities continue to wobble as trading session opens for the week. As death tolls continue to escalate on corona virus outbreak, WTO director general voiced concerns on possibility of virus spreading to Singapore a major global trading hub rising caution in the broad market. European market opened dovish on broad based cautious outlook and saw a steeper nose dive as UK announced crackdown measures in order to prevent mass outbreak of virus in the country. News of German Chancellor Merkel’s heir apparent stepping down from the race also added to risk averse market mood resulting dovish activity across European session. Forex market saw contrasting activity with major global currencies trading on positive note against US Greenback.

Precious Metals: Rare metals price shot up sharply as WTO head’s comments and political developments in Germany boosted demand for safe haven assets. Escalating caution on virus outbreak is likely to keep price of gold and other major rare metals fundamentally supported in near term.

Crude Oil: Crude oil price continued to decline in today’s trading session as demand to supply outlook continues to remain in favor of crude bears. Russia’s hesitation to comply with OPEC+ recommendation for further steeper cuts also fueled dovish influence surrounding crude oil price action.

AUD/USD: The pair continues to trade on positive note but price remains below 0.6700 handle. Weaker USD in global market helps keep AUD bulls afloat but pair lacks clear directional bias. Traders are now waiting for NAB business confidence data for short term trading cues.

On The Lookout: Today’s US market hours are void of any major updates leaving broad based investor sentiment to dictate price action in Wall Street. While there are no macro economic updates, there is a speech from Fed member Harker later in the day followed by release of Home loans and NAB business confidence data from Australian calendar which are likely to provide some level of intra-day trading impetus in Pacific Asian session. In earnings calendar, Wall Street will see quarterly data from Allergan, DaVita, Everest, Federal Realty, Loews add Mercado Libre.

Trading Perspective: Wall Street is set to see mixed opening in North American session today as dovish signals from China and European market are sure to put a damper on market mood regardless of positive cues from any local developments and earnings reports.

EUR/USD: The pair is seeing price oscillate between 1.09 to 1.095 handle on mixed cues in global market. For now Euro bulls are fundamentally supported owing to positive outcome in EU sentix investor confidence data. Traders await Fed harker speech for profit opportunities.

GBP/USD: The pair is trading positive in the global market as GBP bulls see strong support around 1.2900 handle where the price consolidated earlier in the day before its next move upwards. However, virus outbreak crackdown efforts cap gains. Traders await fresh developments in UK for directional cues.

USD/CAD: The pair is trading positive in the global market as USD holds firm despite lingering risk  appetite in broader forex market. A sharp decline in crude oil price is also adding to USD’s strength as supply concerns amidst decreasing demand and developments surrounding supply decision from OPEC + members keep commodity linked currency Canadian Loonie under pressure. Traders await Canadian Housing starts and building permits data for short term profit opportunities.