Global Equities Positive on Fed Cues, US Earnings in Focus. Fed rate cut bets continue to inspire gains in risk assets but macro data hurts momentum in European market. Blackrock and Amex earnings in focus.
Summary: Asian market today saw major indices and futures trade positive on cues from US Fed speech last night which boosted fed rate cut bets. As expectations for rate cut went up, risk appetite rose high in the global market. European markets also opened positive on fed cues and healthy risk appetite. Further, market bulls received positive sentiment on gains led by raise in Inbev shares over news of Inbev agreeing to sell its Australian operations to Japan’s Asahi. Lukewarm earnings reports of major global corporate giants continue to influence price action across all major global equity markets. On forex market, fed cue influenced weakness pressured USD to lose little gains it made mid-week. Weaker dollar boosted participation from emerging market and lower exchange rates also served as positive factor causing major global forex currency pairs to see positive price action in Asia and European trading session today.
Precious Metals: Precious metals saw dovish price action today as most major markets which provide demand for gold from Asia-Pacific region booked profits on this week’s price rally. However, decline was limited owing to weak USD which provided some level of support preventing steep downward move.
Crude Oil: Crude oil price is seeing flat activity in the global market amid lack of fresh cues. But escalating tensions from Middle East capped declines on news that US Navy short down Iranian drone and Iran’s comments on seizing foreign vessel. US Crude oil to close for the week above $55 per barrel.
AUD/USD: The pair is trading with dovish momentum in the global market today despite USD’s weakness as price of copper which is one of major exports from Australia declined. Prolonged Sino-U.S. trade war is yet another factor weighing down AUD as trading session comes to close for the week.
On The Lookout: Most major macro data updates and geo-political events of the week are already over with and market has settled into pace. Lack of progress in geo-political events resulted in macro data updates and central bank cues acting as major driving force behind risk assets this week. Fed rate cut bets continue to escalate weighing down USD. Meanwhile, ECB also seems to be preparing some adjustments to its monetary policy which is affecting Euro’s momentum in the global market. Dovish German economic data was yet another factor limiting gains in latter half of the day while prevalent risk on investor sentiment helped prevent major indices from closing in red. Traders now wait US Michigan Consumer data and Canadian retail sales data from economic calendar updates and earnings report from American Express and Blackrock for short term trading cues.
Trading Perspective: Forex market will see major global currencies close positive owing to weak USD pressured by fed rate cut bets as trading session comes to close for the week. However, Microsoft gains led cues helped US index and stock futures trading in the international market see positive price action. Prevalent risk on investor sentiment will support Wall Street to open positive but earnings reports will decide the overall price momentum as trading session progress further.
EUR/USD: The EURUSD pair is trading with dovish bias in the global market today as investor expectations for rate cut by ECB pressured the common currency. Further disappointing German macro data also weighed down EURO while USD’s weakness helped limit decline. Traders await US macro data for short term profit opportunities.
GBP/USD: The GBPUSD pair is also trading with dovish bias in the global market weighed down by cues from Europe and Brexit uncertainties. However, the British Pound has managed to hold steady above 1.2500 handle across the day. If this continues the pair is likely to close above 1.25 handle for the week. Traders await US Michigan consumer data and positive outcome could push GBP below 1.2500 handle.
USD/CAD: The pair is trading positive but is unable to scale resistance near 1.31 handle causing the pair to decline back into 1.30 handle despite hitting as high as 1.3110 earlier today. Fed rate cut bets and firm crude oil price caps USD’s gains. Traders now await Canadian retail sales data and US Michigan consumer data for short term trading cues.
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