Intel, AT&T, and Twitter stock earnings in focus, geopolitical woes pressure investors into defensive activity despite stimulus measures which provided hopes for economic recovery.
Summary: Global market is seeing major indices and key equities continue to trade mixed as geopolitical woes plague risk sentiment in the market while cues from stimulus measures and vaccine development help underpin investor sentiment to some extent. European market today saw major indices and key equities edge up in early trading session despite pressure from US-China tensions as upbeat earnings from Unilever and Daimler helped support market price momentum to some extent. Better than expected, German consumer climate data was also a welcoming cue in the market, however price action took a hit later in the day over worse than expected readings in Euro Zone consumer confidence data.
Rare Metals: Both Silver and Gold are continuing to post solid gains across futures and spot markets as uncertainties in market-led by geopolitical woes greatly support safe-haven demand. Gold and Silver continue to post fresh monthly highs, and gold is well on its way to rescale 9-year highs, albeit still remaining capped below $1900 handle.
Crude Oil: Crude oil price is flat in the international market today, and the price of both Brent and WTI futures even showed signs of slight bearish tone in European market hours. Following sharp build in US weekly stockpile data escalating China-U.S. tensions also came as a below to demand outlook causing early gains made from EU stimulus update to evaporate in the market.
DXY: As tensions between China and the USA continue to escalate, USD continues to take a deep hit. Expectations surrounding the 5th government stimulus package remains strong as traders and analysts believe that the government will come up with a stimulus package regardless of disagreements between trump administration and the senate. This further adds pressure to USD keeping it well near monthly lows.
On The Lookout: Focus remains on updates pertaining to the 5th Government covid-19 support package in the USA. Earlier yesterday, US Senate Republicans and White House announced that they have hammered out principle portion in agreement for an upcoming stimulus package. The update also mentioned that lawmakers are pushing to pass legislation before the end of the month, keeping risk sentiment supported to some extent. China continues to warn the US against its move threatening to retaliate should it enforce its order to force close Chinese consulate in Houston. The US has given a 72-hour deadline since it made its initial announcement, and as clock ticks closer to the deadline, the tension in global market peaks over what could become yet another long-lasting war between the US and China.
On the release front, the US calendar sees the release of Initial and continuing jobless claims while the earnings calendar remains as busy as yesterday in Wall Street. Some of the key stocks for which traders await earnings reports include – Intel AT&T, Union Pacific, Kimberly-Clark, Dow, Twitter Inc, Hershey, VeriSign, Fortinet, Citrix Systems, Tractor Supply, First Energy, E-Trade, Allegion PLC, Pentair, Under Armour A & C, Alaska Air and Alliance Data Systems.
Trading Perspective: Wall Street is expected to open flat over dovish cues from the international market and pressure from escalating China-U.S. tensions. But price action in the market today will remain fundamentally support in favour of bulls as hopes for the stimulus package and earnings report dictate short term directional bias.
EUR/USD: The pair is trading with a clear positive note today and remains firmly rooted above 1.16 handle, but gains are capped below the 1.1630 mark as mixed data from the EU area weighed down Euro bulls. But USD’s weakness in the broad market keeps ongoing rally well supported in the short term. Traders now await US jobless data for short term profit opportunities.
GBP/USD: The pair is trading mostly flat in the international market today but showed clear signs of positive bias as an update from UK Brexit negotiators that little progress has been made in talks helped support GBP bulls. But pressure from escalating geopolitical tensions from both US & China amd UK and China keeps GBP well under pressure. For now, weak USD continues to drive a rally in favour of GBP, allowing price to hold above 1.27 mark while traders await US jobless data for short term profit opportunities.
USD/CAD: The pair is trading with clear dovish bias, but the decline is very limited as CAD lacks the strength to build rally over the latest changes in demand outlook for crude oil. Escalating geopolitical woes over UK-UK and China relations and recent US weekly crude oil stockpile data greatly affected oil prices, keeping decline in check. However, pressure from stimulus measures taken by the government keeps USD under considerable pressure causing pair to trade Rangebound within familiar price levels. Traders now await US data for short term profit opportunities.
Please feel free to share your thoughts with us in the comments below.