Post Holiday Market Is Seeing Mixed Activity in European Markets

Easter Holiday

Global markets are seeing mixed price action amid silent macro calendar as usual trading activity begins in most major markets post-Easter holidays.

Summary: Asian and European markets are seeing major benchmark indices, equities, and forex pairs fight to get rid of bearish influence as usual trading activity resumes post-Easter holidays. Profit booking activity ahead of Easter holidays had left most major assets drained of their gains as the trading session closed last week. Update from China on plans for slowing down further policy easing given strong first quarter financial data released last week and US government’s decision to stop granting waivers for Iranian crude oil import with the threat of sanctions on countries which continue to trade with Iran are weighing down investor sentiment in the broad market today. Forex markets are seeing positive price action compared to equities. Dovish cues from Asian market and worries over geopolitical issues caused most major European markets to open and trade with a bearish bias today.

Precious Metals: Both gold and silver are trading in red today across Asian and European market hours. Profit booking on yesterday’s gains erased previous session’s gains. Mixed price action is global market has failed to create any visible change in the precious metals market, as there hasn’t been any major event or news that could trigger demand for safe haven assets. This has left precious metals to trade range bound today.

Crude Oil: Crude oil continues to trade positive for the fourth consecutive trading session today. Both Brent and WTI benchmarks saw crude oil price scale new 2019 highs as an update from the US on stopping Iranian crude oil import sanction waivers from May 2019 continues to impact global investor sentiment. Most major markets opened for the week today post-Easter holidays and this is the reason for the update’s prolonged impact on crude oil price action.

AUD/USD: The pair fell to 2-week lows as US Dollar continues to grow strong in the broad market. Aside from US Greenback’s T.Yield influenced strength, the impact of China’s decision to slow policy easing on account of strong Q1 financial data also weighed down the Australian dollar in the broad market. Lack of strong risk appetite and driving force to push the pair back on bull’s path has resulted in the pair seeing sharp decline today.

On The Lookout: Major risk assets saw subdued opening amid relatively silent macro calendar schedule. There hasn’t been any progress in geopolitical events as well as leaving the global market with a lack of strength to drive a rally in either direction. Moving ahead, while headlines relating to geopolitical events will continue to remain the main focus of investors, high impact macro data updates will keep intra-day trading activities highly active and volatile. The main focus is on the economic calendar front in the week ahead of US GDP update and monetary policy committee’s interest rate decision update from the Bank of Canada and Bank of Japan. European macro calendar remains silent for the day and in immediate future, the key macro data updates for the day are Services PMI update and New Home Sales data from USA.

Trading Perspective: While forex markets may continue to see mixed price action, cues from international market suggest that Wall Street indices and equities are likely to see positive price action today.

US Indices: US benchmark index futures trading in the international market were positive ahead of the Wall Street market opening. Amid lack of geopolitical event related headlines, US decision to stop Iran crude oil sanction waivers is the only factor driving bearish price action in the market. Risk appetite remains relatively steady in the market aside from Iran sanction related decision made by the US. This suggests that major benchmark indices and US equities will open and trade with positive bias today.

EUR/USD: The pair is seeing two-way price action today on mixed cues and divided investor sentiment in the global market. Despite sharp price swings in both directions, the price action in pair remains range bound near the mid-1.12 handle. Traders await US macro data updates for short term directional cues. A break below 1.1225, 1.1205 will give bears control over price action while stability above 1.1280, 1.1295 is required for bulls to gain control of price action.

USD/CAD: While positive price action in crude oil price in the global market continues to keep gains in check for USD, the pair is still trading with positive bias. Despite crude oil price scaling new 2019 highs on consecutive trading sessions, a rebound in U.S. T.Yields and mixed price action in global market favours positive price momentum for US Greenback. Investors now look at macro data updates for short term profit opportunities while waiting for BOC’s interest rate decision update which has influenced traders to hold back from placing major bets today.