Positive cues from previous session in US Wall Street, upbeat Chinese GDP data helped keep risk appetite high underpinning positive price action in the global market ahead of Wall Street opening today.
Summary: Major equities across Asian and European markets saw positive price action today. Wall Street last night closed positive on influence gained from Qualcomm shares spiking over 20% over surprise settlement with Apple. A bout of positive earnings update which beat estimates from major analysts was also major contributing factor to Wall Street’s positive price action. Asian market also saw positive price action in all major stock exchanges with positive investor sentiment, risk appetite and market bulls receiving positive support from positive Chinese GDP data. However, fall in metal and mining sector shares in Australian market saw Australian benchmark indices close in the red. Optimism for positive progress in trade talks, positive cues from Asian and European markets, healthy risk appetite among global investors served as fundamental support influencing positive price action in European equity market. Prevalent risk on investor sentiment was also reflected in price action of major global currency pairs across Asian and European market hours.
Precious Metals: Gold fell sharply and settled well near four month lows today as positive Chinese GDP and positive cues from US Wall Street boosted risk appetite in the global market. While risk on investor sentiment has been prevalent in Asian and European markets, capping price action of safe haven assets, Silver is range bound price action with relatively positive bias with weak USD providing further support to white metal.
Crude Oil: Crude oil price stabilized late yesterday as supply woes finally gave crude bulls a strong push to move price to positive territory. A sharp drop in API weekly crude oil stockpile data from USA, positive Chinese GDP data which is viewed as signal for possible increase in import demand served as trigger for further upside movement in early trading session post which crude oil has held fort near intra-day highs across European market hours.
AUD/USD: The pair saw sharp rise to 8-week highs during Asian market hours as Chinese GDP data saw better than expected readings. Australian market being linked to China via trade ties got a solid boost fuelling AUD’s rally, but the pair soon feel from multi week highs and is trading back below 0.7200 handle as influence from Chinese GDP eased in the global market.
On The Lookout: While equities and Forex market are seeing positive price in European market hours, positive momentum is slowing down ahead of Wall Street opening. Disappointing UK inflation data and neutral Euro area CPI data have caused positive investor sentiment to take a hit. With earnings season dictating short term price action and geo-political events controlling long term price trends of major risk assets, macro data updates controls intra-day price activity. As Easter approaches, day traders are likely to book profits which could result in short term trend breakouts in major assets in the trading sessions the week ahead. Forex markets are seeing price action trapped in range regardless of short term bias as lack of progress in geo-political events has left major risk assets trading in familiar levels. Late European market hours will see speech by BOE governor Mark Carney while Canadian calendar is set to see the release of trade balance and CPI data. US calendar doesn’t have any major impact updates aside from EIA weekly crude oil stockpile data. This suggests price action in the market is likely to be controlled by broad based investor sentiment.
Trading Perspective: Positive earnings updates, bullish cues from Asian and European markets are likely to influence positive price action in US Wall Street. Earnings reports will continue to dictate price action in Wall Street.
US Indices: US benchmark index futures trading in the international market saw positive price action. Positive cues from previous session, healthy investor risk appetite, positive Chinese macro data are some of the major factors driving price action in the international market today. A positive price action in US equity market today could influence S&P 500 index to test yearly highs once again today, but price action is likely to be controlled by broad based investor sentiment which could reflect earnings report updates. United Rentals, Pepsico, Morgan Stanley and Abbott Labs are some of the earnings reports investors are on lookout for today.
EUR/USD: The pair saw sharp upward price action in Asian market hours on healthy risk appetite and positive Chinese GDP data. However, neutral Euro area macro data and dovish UK inflation data weighed down the common currency causing the pair to erase most of early gains and taking on dovish price action. A fall below 1.1300 is highly likely but the pair could find strong support near mid-1.12 handle above which the pair will trade range bound for rest of today’s trading session.
USD/CAD: Canadian Dollar gained positive bias following draw in US weekly API crude oil stockpile data. Further, a boost in crude oil price in the global market pushed the pair to the downside keeping strong pressure on USD. Positive Chinese macro data and prevalent risk on investor sentiment also capped USD bulls supporting Canadian Dollar. Investors now await Canadian CPI, trade balance data updates and US EIA crude oil weekly stockpile data for short term profit opportunities and directional trading cues.