European Equities Down on Inbev Cues, Verizon & Neilsen Earnings in Focus. Global economic growth outlook keeps major indices and stocks range bound, earnings reports to continue driving price action of major risk assets in Wall Street.
Summary: Global equities come under pressure on last trading session of the week as global growth concerns weigh down investor sentiment. With central bank meetings coming into focus, traders await cues from policymakers on measures to support economy as prolonged geo-political issues decrease outlook for global economic growth. Asian market saw major indices and equities trade and close for the week on relatively subdued note. But European market saw major indices and equities decline sharply for first time this week as worse than expected earnings report from Brewer Inbev and increasing Brexit uncertainties weighed down investor sentiment. In forex market, major currencies continued to trade and close in red as market mood displays a clear risk averse tone but price action remains trapped within familiar levels instead of seeing steep decline as bulls and bears lack trigger and directional bias to create a breakout in ongoing price rally.
Precious Metals: As market mood turned risk averse, rare metals gained considerable momentum in resulting safe haven assets demand. This caused price of gold to breach fresh two week high and head for best weekly close in five weeks while other metals such as palladium and silver also saw gains.
Crude Oil: Crude oil is seeing positive price action in both major international benchmarks in global market. The positive action is supported by unexpected drop in US Weekly inventory stockpile data and news of measures from OPEC & its allies to extend ongoing production and supply cut agreement.
AUD/USD: The pair is trading flat with bias in favor of AUD despite seeing decline overnight on cautious investor mood. AUD bulls managed to hold steady above 0.6800 despite strong pressure from USD resulting in bears losing strength and pair continuing to trade above 0.68 handle across the day.
On The Lookout: All major events for the week have come to a close. Traders are now on lookout for local macro data updates and headlines for short term profit opportunities before placing major bets ahead of upcoming US Fed policy meet decision. On Brexit front, UK PM Boris Johnson has finally made a public announcement stating that he won’t go ahead with Brexit in upcoming deadline which helped ease some nerves. However, comments from Johnson calling for fresh elections in December, 2019 kept political tensions as high as ever in European market. Traders are now shifting focus to cues from US Fed ahead of upcoming interest rate decision with majority of traders expecting a rate cut in the upcoming meeting. On the release front, Canadian calendar will see release of budget balance data while US calendar will see release of Michigan Consumer Sentiment, Current Conditions, Consumer expectations and inflation expectation updates. On earnings calendar schedule, US market will see quarterly data from Kirby, Illinois Tool Works, Franklin Resources, Aon, Nielsen, Ventas and Verizon.
Trading Perspective: Amid lack of major events, stalemate in geo-political events and noisy political scenario in major economies with nothing concrete set to occur on last trading session of the week, Forex market is set to see major currency pair continue to trade and close range bound well inside familiar price levels today. US futures trading in international market saw positive activity today as earnings reports from major firms released yesterday saw positive outcome. Both major indices S&P 500 & NASDAQ are set to see best week in more than a month on earnings report cues as quarterly report from most major firms released so far this week saw positive earnings data. However, given the mixed outlook for earnings calendar today, price action is likely to be muted in Wall Street as trading session comes to close for the week.
EUR/USD: The pair is trading flat with bias in favor of EURO but the price action is barely holding steady above 1.1100 handle. Mixed data outcome amid increased concerns surrounding global growth kept EURO bulls in check, while firm USD also added to pressure on the common currency. Traders now await US data for short term profit opportunities and directional cues.
GBP/USD: The pair continued to decline building up on its downward price movement from previous session on increased political tensions in UK. However, losses were contained above 1.28 handle as PM Johnson openly announced that he won’t go ahead with forced Brexit later this month. Traders now await US data for short term profit opportunities.
USD/CAD: The pair is currently trading range bound near mid-1.30 handle as price action is seeing consolidation near multi-month lows hit in previous session. Upbeat crude oil price underpins CAD, while firm USD and cautious investor sentiment on global growth woes keeps CAD bulls in check resulting in range bound activity. Traders now await US data for short term profit opportunities.
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