Busy Macro Calendar to Keep Wall Street Busy, Geo-Politics Remain in Focus

Wall Street Busy

USMCA deal now moves to US Senate while China-US trade deal gains timeline update bringing fresh fundamental support for a positive activity to keep Wall Street busy. US GDP and other macro data updates in focus. 

Summary: The Asian market saw a divided activity as the trading session comes to close for the week. While Indian and Singapore markets closed positive, trade deal uncertainties weighed down market bulls causing Japan, Aussie, and Chinese equities and indices to close in red. However, losses were capped over comments from US Treasury Secretary Steven Mnuchin who said that China and the USA will tentatively sign a trade deal in early January finally giving traders clarity in the form of approximate timeline information.

The European market saw a relatively silent trading activity as traders are finally starting to get ready for the year-end holiday season. However, the Italian market saw several key equities and indices trade with an overwhelming upward bias on some positive company updates. In the Forex market, USD was mixed in European session with major currency pairs trading mostly flat amid thin liquidity on the last session this week. 

Precious Metals: Rare metals traded flat as lingering caution continued to underpin safe-haven asset demand. But a fresh update from the US reveals an approximate timeline for trade deal boosted risk appetite causing a decrease in fund flow to precious metals resulting in flat price action. 

Crude Oil: Crude oil price holds steady near 3-month highs scaled earlier this week. News of progress in trade deal boosted an already positive fundamental support for crude oil bulls stemming from a drop in US stockpile and OPEC’s extended supply cut resulting in steady positive price action for crude oil.

AUD/USD: The pair is continuing to trade with a positive note but has failed to gain a breakout to the upside despite recent uptick on trade deal optimism and data-driven price momentum. For now, the news of timeline information for trade deal continues to keep Chinese proxy trading with a positive note and the same is likely to remain steady as the pair closes for the week. 

On The Lookout: Today’s market hours will continue to remain event filled on both sides of Atlantic, keeping trading activity considerably liquid even if the volume is thin as traders prepare for the year-end holiday season.

On the European side, the UK parliament is set to see a vote on the major Brexit amendment proposed by PM Johnson which will greatly affect and shape the outcome of Brexit.

On the US market, following House of Representative’s approval for the USMCA deal, the draft has moved to the senate which shows a relatively less enthusiastic attitude towards approval of the deal. Aside from USMCA, there is unlikely to be any major update on other geo-political events which leaves price momentum at mercy of macro data.

On the release front, the US calendar is set to see the release of the PCE price index, Personal Spending, Michigan inflation expectations, and US Q3 GDP data while Canadian calendar will see the release of Core retail sales, new housing price, retail sales, and budget balance data. 

Trading Perspective: Forex market is set to see Rangebound price action continue unless US data release sees a high deviation from expected readings given the fact that short term price momentum is influenced by recent geopolitical events related headlines.

US futures trading in the international market saw positive activity ahead of Wall Street opening on trade deal timeline update influenced investor sentiment. This along with positive cues from the European market suggests Wall Street is set to open positive for the day. However, US macro data outcome from later in the day will decide the intra-day activity’s directional strength. 

EUR/USD: The pair is trading with clear dovish bias building up on overnight decline pushing the price below 1.11 handle. Fresh updates on the Sino-U.S. trade deal timeline and rise in US bond yields helping USD gain strength adding pressure to EURO bears. Traders now await US data for short term profit opportunities. 

GBP/USD: The pair is trading positive today as unexpectedly positive Q3 GDP outcome despite the impact of Brexit uncertainties in the recent past helped gain a break from Brexit anxiety-driven declines. However, firm USD and caution ahead of today’s House of Commons vote on UK PM Johnson’s Brexit bill keep gains in check. Traders now await US data for short term profit opportunities.

USD/CAD: The pair gained positive momentum as USD gained strength on a spike in US T.Yields. However, gains were capped as CAD was underpinned by positive crude oil price and news of USMCA deal being approved by US house of representatives and timeline update for China-U.S. trade deal. Traders now await the US and Canadian macro data for short term profit opportunities. 

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