US Wall Street to see subdued trading activity on mixed earnings report forecast, interest rate decision from the US Fed and Bank of Canada later this week also remains in focus.
Summary: Wall Street closed on a positive note last night over comments from President Trump who said he expected China and the USA to sign a significant part of the trade deal ahead of schedule. This caused Wall Street indices to close at all-time highs.
Asian market followed cue from Wall Street and traded on a positive note with several key indices scaling fresh three month highs on renewed trade optimism. However, the European market saw contradicting price action as major indices and key stocks declined over earnings influenced cues. Further, caution among global investors ahead of upcoming Fed interest rate decision meetings also dampened risk appetite, resulting in dovish price action. In the forex market, expectations for stimulus measures from the FOMC in upcoming policy decision meetings helped USD gain strength resulting in mixed price action among major global forex currency pairs.
Precious Metals: Rare metals declined in the global market today following the latest developments in Sino-U.S. trade talks and strong USD in the global market. However, cautions ahead of upcoming FOMC meeting and risk-averse activity in European markets helped keep declines in check.
Crude Oil: Crude oil price declined in the global market as traders expect US weekly inventory update to see a build in stockpile causing the price to decline for the second consecutive session today. Also, doubts surrounding the timeline for further output cut decisions from OPEC also weighed down crude bulls.
AUD/USD: The pair is seeing zig-zag price action inside familiar price levels on cues from RBA Governor Lowe’s speech. However, optimism surrounding the trade deal helped keep the price steady above the 0.68 handle despite USD’s rebound in the global market.
On The Lookout: All eyes are now focused on back to back interest rate decision updates from major global central banks that are set to release over the course of the next two days. US Fed’s two-day FOMC interest rate decision is set to begin today and traders expect Federal Reserve to announce rate cut for the third time in a row when the session concludes tomorrow and this has caused the USD index to see upward move against six major global currencies. There are several analysts who expect the possibility of the US Fed to keep easing measures active even in 2020 which makes the forward guidance update a major headline to watch out for.
Aside from the Fed interest rate decision, the macro calendar also shows release on the interest rate decision from the Bank of Canada tomorrow and decision from the Bank of Japan day after tomorrow. While Trump’s comments have boosted optimism surrounding trade deal, lack of exact timeframe details has resulted in cues from last night’s headlines easing off in the global market. In the North American market hours later today, the US market is set to see the release of CB Consumer Confidence data and Pending Home Sales data. US API weekly crude oil stockpile data will hit the market in late American market hours.
On earnings calendar front, the US market will see quarterly data from AMD, AO Smith, Corning, Cummins, Eaton, Edison, Electronic Arts, General Motors, Kellogg, Master card, Maxim, Merck & Co, Pfizer, S&P Global and Xerox.
Trading Perspective: The forex market is likely to continue trading within familiar price levels as USD continues to grow stronger ahead of the FOMC meeting on broad-based cautious investor sentiment. US stock and index futures trading in the international market saw dovish price action ahead of Wall Street opening as forecasts hint at a mixed outcome in earnings reports of major firms set to release later today.
EUR/USD: The pair is trading range-bound trapped between 1.1070 and 1.1105 as caution ahead of the upcoming fed meeting helped USD grow stronger while optimism surrounding Sino-U.S. trade talks kept EURO bulls underpinned. Traders now await US data for short term profit opportunities.
GBP/USD: The pair hit as low as 1.2808 earlier today on Brexit woes and firm USD. But news of Labour party joining several others to back UK PM Johnson’s bid to an election in December helped the pair move back above the mid-1.28 handle. Traders now await US data for short term profit opportunities.
USD/CAD: The pair is trading positive in the global market as CAD lost strength on the decline in crude oil price wile USD grew stronger on broad-based cautious investor sentiment ahead of the upcoming FOMC interest rate decision meeting update. Traders now await US data for short term profit opportunities.
Please feel free to share your thoughts with us in the comments below.
