While European market is seeing positive price action on upbeat macro data and Brexit delay which supports steady risk appetite, dovish central bank cues continue to hamper progress in major global markets.
Summary: Major equities and benchmark indices in the global market see mixed activity in Asian and European markets yet another day. Increasing anxiety over a global economic slowdown continues to keep gains in check capping momentum influenced by upbeat macro data. This has resulted in US Wall Street seeing mixed price action last night, which then carried forward into Asian market hours with Chinese market seeing sharp declines while Japanese & Singapore markets seeing positive price action. While Chinese trade balance saw positive growth, the imports have seen sharp decrease which shows impact of ongoing trade war between US and China and boosts concerns on possibility of a slowdown in Chinese industrial activity. However, European market is seeing all major indices and equities trade positive across major stock exchanges with positive support stemming from upbeat macro data and ease of concerns surrounding Brexit in immediate future. USD denominated major global currency pairs continue to trade positive in global market on upbeat investor risk appetite in European market hours.
Precious Metals: Both gold and silver gained positive momentum in the global market today. The upside movement was inspired by a spell of mixed investor sentiment in US & Asian markets. Concerns of global economic slowdown, dovish central banks helped precious metals climb up while dovish USD added further support to upward price momentum albeit price of both gold and silver remaining below critical levels.
Crude Oil: Crude oil price saw positive momentum in the global market today in both Brent and WTI benchmark indices. Both spot Forex and futures crude oil contracts rose near 2019 highs as concerns of supply disruption stemming from middle east on political tensions and OPEC enforced supply cut agreement on member nations greatly outweigh influence from any other macro data updates and market headlines providing solid fundamental support to crude oil bulls.
USD/JPY: With equities rallying in the global market despite mixed cues and risk appetite remaining high in Forex and equity market, JPY is seeing reduced demand. While there is some level of risk averse action in the market it is yet to spike to level where people flock to yen and this has helped USD maintain upper hand despite Greenback’s prevalent weakness in the global market. Also US T.Yields rising to monthly highs provided some support to USD bulls helping the pair scale 5 week tops.
On The Lookout: With key geo-political events and updates out the way as trading session comes to an end for the week, price action is driven by broad based investor sentiment. Regardless of tensions flaring earlier this week with headlines hinting at possible escalation of trade tensions, neither Sino-U.S. nor E.U.-U.S. trade talks have made any major progress. Brexit has been postponed albeit not to expected extent disappointing investors across the globe but the influence from all above mentioned events and updates have already seen their fair share of activity in the market. As investors still remain cautious of possible global economic slowdown, cues from dovish global central banks and general risk appetite in the market are the only factors contributing to price action in the market today. European markets are seeing positive equity and Forex market price actions but better than expected EU area macro data updates had little to do with the rally. Investors now await US trade data and Michigan consumer sentiment/expectations data for short term trading cues and profit opportunities.
Trading Perspective: The day ahead is likely to see major equities and benchmark indices consolidate their hold over weekly price range with US macro data influenced rally providing short term profit opportunities.
EUR/USD: The pair trades positive with sharp upward boost in Asian market hours over demand from Japanese banks with positive macro data also providing some level of fundamental support pushing the pair to 2-week highs. The pair has since maintained range bound price action near intra-day highs as USD’s strength on rebound in U.S. T.Yields is capping further upside move. Investors await US trade data for directional cues and the pair could scale mid-1.13 handle in case the data disappoints.
GBP/USD: Despite slight downside move earlier on the day on rebound in U.S. T.Yields, the pair erased all intra-day loss and staged sharp upward price action. Prevalent risk appetite that influenced USD sell off in the market today greatly helped in Sterling’s recovery. But lack of progress in UK cross party talks continue to pressure GBP bulls keeping the pair from climbing back above 1.32 handle which could pave way for moving towards 2019 highs. Investors await US trade data for directional cues.
USD/CAD: The pair retreated from weekly highs hit on crude oil decline earlier this week as Crude oil price rebound in the global market. Rebound in U.S. T.Yields is the main reason the pair didn’t see sharp slide today given the prevalent risk appetite and USD sell off in the global market which combined with upbeat US crude oil price could have pushed the pair back below 1.30 handle. Investors now await US macro data for short term profit opportunities as trading session comes to close for the week.