While trading session today started on a dovish note, healthy EU macro data helped improve investor risk appetite resulting in mixed activity with positive bias in European market hours.
Summary: Equities across major global markets are set for yet another day of bearish declines. Despite positive cues from US Wall Street’s activity overnight, disappointing Chinese PMI updates influenced bearish investor sentiment in Asian market resulting in major benchmark indices and equities trading and closing in red today. Meanwhile, European markets also saw a dovish opening on cues from the Asian market and decline in bank sector shares awaiting macro data updates for short term directional trading cues. However, better than expected Euro area GDP update and German unemployment data provided some level of strength to market bulls preventing high loss in the European market. As risk appetite took a hit, the forex market also saw major forex pairs trade range bound with bearish bias in both Asian and European market hours. While most major global currencies traded subdued, better than expected EU GDP data helped Euro retain positive bias albeit the pair trading flat in the market.
Precious Metals: Both gold and silver gain positive price momentum in the global market today following disappointing Chinese economic data. While risk-averse investor sentiment also underpins US Greenback, the USD has yet to gain solid momentum. This combined with investors caution ahead of Sino-U.S. trade talks and the holiday season in major Asian markets helped gold and silver gain positive momentum in the global market today.
Crude Oil: Crude oil gained positive momentum in the global market today with both major benchmarks seeing over 1% increase in the value. Despite disappointing Chinese macro data updates hurting investor sentiment in the broad market, optimism surrounding Sino-U.S. trade talks and OPEC enforced supply cut agreement underpinning crude oil bulls in the market ensuring positive price action.
AUD/USD: The pair declined earlier in the day on disappointing Chinese macro data updates. However, improvement in investors risk appetite during European market hours following upbeat EU area GDP data helped the Australian Dollar regain lost ground post which the pair is trading range bound in the global market.
On The Lookout: Ahead of tomorrow’s US GDP update, investors focus is on Canada’s GDP update, Bank of Canada Governor Stephen Poloz’s speech and US Pending home sales data for short-term trading opportunities. Aside from macro data updates which are having greater sway over price action in immediate and near future trading sessions, investors focus is turning towards Sino-U.S. trade talks which are entering its final leg. U.S. Treasury Secretary Steven Mnuchin has travelled to China for the latest round of trade talks ahead of Chinese Vice Premier Liu He’s visit to Washington next week. Steven Mnuchin has commented that he hopes to make substantial progress with Chinese negotiators with headlines suggesting that talks next week will likely end in a trade deal between two nations. US Wall Street is likely to see positive price action, but gains could be limited on profit booking activity ahead of upcoming market holidays in major Asian and European markets.
Trading Perspective: Multiple high impact macro data updates from US & Canada are expected to keep price action highly volatile in US market hours today.
EUR/USD: The pair has managed to hold steady upward price action despite a slight decline at the start of the day. Better than expected EU area GDP update and German macro data updates added further support to the common currency’s positive price action. Investors now await US macro data updates for short term directional cues ahead of tomorrow’s US GDP update.
GBP/USD: The British Pound gained some level of positive price action as news hinted at Labour party members considering the possibility of a second Brexit referendum. A fresh wave of USD selling activity ahead of Wall Street opening also provided some support to GBP bulls. Traders now look out for US macro data for short term trading cues.
USD/CAD: The pair traded in favor of USD earlier in the day, but positive crude oil price gave Canadian Dollar a positive edge causing the pair to take on downward price action. Selling activity surrounding USD later in the day caused the pair to completely reverse gains made in the earlier trading session. Investors now await Canadian GDP, BOC Gov Poloz’s speech and US macro data updates for short term directional cues.