Trade deal optimism and easing Middle Eastern woes underpins market bulls as traders await US payroll data for short term profit opportunities.
Summary: Global equities continue to trade on a positive note today, building up on gains made from the previous session. The momentum gained from easing Middle Eastern tensions continues to keep market bulls underpinned from a fundamental perspective providing risk assets with much-needed support to recover most of the loss made at the start of the week. Following cues from Wall Street yesterday which saw major indices and equities scale record levels supported by trade deal optimism and apple gains, Asian markets also traded and closed on a positive note.
European market took cues from its global allies and opened on a positive note. While bulls rode on broad-based positive investor sentiment in the early trading session, the strength in rally faded post-mid-European market hours investors geared up for key payroll data from the USA. In the forex market, USD denominated major global currencies traded with positive bias but remained in familiar levels awaiting US data for short term directional trigger.
Precious Metals: Rare metals continued to decline in steady pace today as risk appetite boomed in the global market. However, weaker USD and caution ahead of a major trade deal between China and the USA kept price steady above key support levels.
Crude Oil: Crude oil price displayed bearish tone in the global market as Middle Eastern tensions continued to ease. However, the price of major futures remained well above critical support and showed signs of consolidation as support from trade deal optimism and OPEC supply cut agreements kept gains in check.
AUD/USD: The pair traded on a positive note today as Australian macro data provided AUD bulls with much need fundamental strength to regain upward momentum. Prevalent trade deal optimism also underpinned AUD bulls providing support for steady positive price action across Asian and European sessions.
On The Lookout: There isn’t much to look out for today aside from US Payroll data as the trading session comes to close for the week. US NFP data for December is expected to see an increase from the previous month while the unemployment rate is expected to remain unchanged.
In Canadian macro calendar schedule, the market will see unemployment rate and employment change data. Aside from these updates, the focus remains on updates from the USA over trade deal following headlines from China which stated that President Xi Jinping’s representative will fly to the USA next week to sign Phase 1 of the trade deal on the expected deadline of January 15th, 2020. Boeing continues to remain under pressure following the recent crash of 737 aircraft belonging to Ukraine International Airlines despite various theories in the market which hint at the possibility of Rogue missile attack.
Trading Perspective: Given broad-based trade deal optimism and prevalent risk on investor sentiment, Wall Street futures trading in the international market saw positive price action with USD all set to see highest weekly gains in two months despite easing up today. Wall Street is all set to see a positive opening following by record performance in major indices today.
EUR/USD: The pair remains steady near 1.11 handle supported by broad-based trade deal optimism and broad-based risk appetite. But cautious tone lingers as USD still remains firm despite recent loss capping Euro’s gains. Traders now await US data for short term profit opportunities.
GBP/USD: The pair is trading steady near 1.31 handle with slight positive bias but gains are capped as concerns of post Brexit relations with EU weigh down GBP bulls. Slight USD weakness provides GBP bulls with some support while traders await US payroll data for short term profit opportunities.
USD/CAD: The pair hold firm near mid-1.3000 handle but remains slightly below overnight highs amid subdued USD demand in the global market. However, CAD failed to capitalize on the same over weak crude oil price in the global market. Traders now await jobs data from the US and Canada for short term profit opportunities.
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