Wall Street set to open lower on cautious tone, European equities dip on earning cues, macro data to provide profit opportunities.
Summary: European market today saw major indices and equities decline owing to disappointing earnings cues, reports, and headlines, which stated that the coronavirus outbreak might be more contagious than previously expected, which caused global economic growth outlook to dwindle once again.
However, market bulls still continue to hold firm as the growth outlook for the global economy from the second quarter of 2020 still doesn’t show any impact of a recent coronavirus outbreak as of yet.
In the currencies market, the Chinese Yuan gained momentum post-PBOC, announcing a rate cut while USD scaled fresh highs and kept major global currencies under pressure.
Precious Metals: Gold price scaled a fresh seven-year high as headlines suggested a possibility of the virus outbreak spreading outside of China. However, gains in rare metals were capped as PBOC announced rate cut, which provided some level of risk sentiment in the market.
Crude Oil: Crude Oil price is trading positive in the global market as PBOC’s rate cut decision is viewed as a sign for increased demand in China, given the news of manufacturing activities resuming this week. However, gains were capped over US API weekly crude oil stockpile data.
AUD/USD: The pair is trading in red, having scaled fresh 11-year lows as disappointing Aussie unemployment rate came as a serious blow followed by headlines stating that the virus outbreak may be more contagious than previously expected. USD’s broad-based strength also weighs down AUD.
On The Lookout: While USD was relatively silent earlier in the day, it has since gained strength and scaled fresh 3-yr highs owing to its gains against Japanese yen and GBP. Reports of a virus outbreak likely to spread across the globe and the death of victims in Japan influenced relatively risk-averse market sentiment.
While US crude oil stockpile remains in focus, crude oil futures are seeing positive price action owing to the visible impact of supply outages from Libya. On release front today, the economic calendar sees the release of Philadelphia Fed data updates and Initial Jobless Claims data from USA and Services / Manufacturing PMI from Japan in Pacific-Asian market hours.
Trading Perspective: Wall Street is likely to open slightly lower today as reports of coronavirus outbreak spreading beyond China dampened investor risk sentiment in the market while it is already suffering a blow from previous session’s Fed meeting minutes release impact. Traders are now focusing on earnings reports from CBS for short term profit opportunities.
EUR/USD: The pair has finally found some strength to stop its decline having remained in the oversold region for quite a while now. The common currency has finally managed to bounce of year lows and is currently trading near the 1.078 handle while traders await US data for short term profit opportunities.
GBP/USD: Despite slight gains made earlier this week, today’s sharp spike in USD outweighed GBP bulls resulting in sharp declines. The pair scaled fresh yearly lows while USD reached new highs in the global market, and the pair is currently trading near 1.2850, while traders await US data for short term profit opportunities.
USD/CAD: The pair managed to reverse loss from the previous session on a broad-based cautious tone and strength of USD. But price remains trapped below mid-1.32 handle as Canadian Loonie remains underpinned by the positive crude oil price. Traders now await US data for short term profit opportunities.
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