European market closes the week on disappointing note over data and Italian political scenario driven momentum. US & Canadian data in focus for short term profit opportunities.
Summary: Global equity markets are seeing dovish picture in last trading session of the day. Asian market saw relatively mixed outcome with China and Singapore markets taking a dovish hit while other major economies such as Australia, Japan, India, Korea and Taiwan saw positive outcome. Later in the day, equities across Middle East and European markets saw dovish performance on geo-political cues. In European market, instability in Italian government as Matteo Salvini, Leader of ruling League party pulled back his support for country’s ruling coalition adding more dovish influence to market which was already suffering from increased odds of No-Deal Brexit scenario and prolonged Sino-U.S. trade war. Further, data driven momentum saw bears drive the price to fresh lows as both EU and UK data disappointed with UK GDP, trade balance and manufacturing production data outcomes pointing to worst economic hit since 2012 just as UK and EU are heading to hard Brexit outcome scenario. Forex market is seeing mixed activity with risk aversion giving bears the upper hand.
Precious Metals: As predicted earlier this week, safe haven demand pushed the price above $1500 handle as high as $1510.38 earlier this week. But lack of strength owing to easing trade war woes and profit booking activities resulted in the pair declining below $1500 handle. But prevalent risk aversion over issues in Europe helps keep price of gold above $1490 handle. Meanwhile Silver remains steady above $16 handle and is trading with positive bias today.
Crude Oil: Crude oil price is trading positive in the global market today with both major international benchmarks Brent and WTI seeing positive activity. While International Energy Association reported that demand growth for crude oil is at lowest level since financial crisis of 2008, influence from draw in US crude oil inventory and expectations of further production and supply cut from OPEC in near future caused crude oil bulls to remain fundamentally supported across today’s trading session so far.
USD/JPY: The pair is trading well in red today as risk aversion in the global market remains high. Demand for safe haven assets/currencies is spiking with each passing day as odds surrounding prolonged trade war and hard Brexit outcome are steadily increasing. USD remains week on decline in US. T.Yields meanwhile Yen is growing stronger. Traders are now awaiting US macro data for directional bias just as the pair is looking to break below $106 handle and enter $105 price level in early European session.
On The Lookout: As trading session comes to close for the week, yet another major event shocked the global market increasing dovish influence from geo-political woes. There are now new/fresh developments in major geo-political events that could influence a bullish breakout in global financial market. Meanwhile, instability in Italian politics following Salvini’s latest move is talk of the market as any further unfavourable developments in Italian politics could cripple European economy significantly. Meanwhile, despite lack of change in status quo surrounding hard Brexit outcome, Jeremy Corbyn is back to forefront again with his efforts to try and prevent Hard Brexit outcome as it seems highly unlikely for Boris Johnson to face a no-confidence vote scenario. In North American market hours today, traders are set to see release of US PPI data, Canadian Building Permits data, Employment change and Unemployment rate data.
Trading Perspective: In Forex market dovish activity is likely to continue but dovish outcome in US macro data could result in USD weakening further, giving major global currencies a small opportunity to reverse some of intra-day losses. US stock and index futures trading in the international market saw dovish activity ahead of US market hours despite yesterday’s session seeing US indices seeing positive activity as geo-political woes greatly affected investor sentiment. US Wall Street is likely to see subdued opening on last trading session of the week amid silent earnings calendar.
EUR/USD: The pair is trading positive in the global market today supported by USD’s weakness driven rally. But gains are capped and price remains well below 1.1200 handle as EURO bulls suffered sharp bearish influence from disappointing EU/UK macro data and Italian Political uncertainties. Traders now await US macro data for short term profit opportunities as trading session comes to close for the week.
GBP/USD: The pair suffered sharp losses today with price hitting new 2-year lows as UK macro data hinted that UK economy took worst hint since 2012 while GBP is already suffering from increasing odds of hard Brexit outcome scenario. The pair is trading above mid-1.20 handle for now but positive outcome in US macro data could lead to pair declining below 1.2050 handle as trading session comes to close for the week.
USD/CAD: The pair is trading flat in the European market hours with bias slightly favouring Canadian Loonie. The commodity linked currency Canadian Loonie is gaining positive momentum today as Crude oil is seeing positive price action in the global market while USD suffers from weak US T.Yields. Traders now await US and Canadian macro data for short term profit opportunities and directional bias as trading session comes to close for the week.
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