The global market is trading positive on prevalent risk appetite and dovish fed rate decision expectations. All eyes are on US macro data for short-term profit opportunities as the trading session comes to a close for the week.
Summary: Asian equities today traded positive as market bulls still receive positive influence from dovish fed rate decision expectations. However, liquidity was relatively low as the Chinese market was closed for the day. European equities recovered from the previous session’s loss induced by ECB forward guidance given prevalent risk appetite in the market. Further, positive influence from the sharp jump in French Pharmaceutical company Sanofi’s shares also helped strengthen risk appetite in the European market. European equities are currently on a path for best week in the last two months given positive price action so far. However, geopolitical woes continue to hinder the market from seeing a sharp upside move. Forex market continues to see positive price action as the trading session comes to close for the week given prevalent risk appetite in the market and weak USD.
Precious Metals: Precious metals continue to retain yesterday’s positive momentum amid healthy risk appetite owing to dovish fed rate decision expectations, which continue to weigh down USD in which they are denominated. Gold is now well on the path to rescale 2019 given strong foothold above the $1330 handle in the current market.
Crude Oil: Crude oil price is trading positive today in the international market following positive influence gained from Saudi Arabia energy minister’s comment. Falih commented that OPEC is close to agreeing on an extension of supply cut agreement and they are focusing on ways to accommodate non-OPEC nations. This has helped both international crude oil benchmark gain positive strength.
AUD/USD: While weak USD continues to underpin AUD bulls, the pair is trading in red across Asian and European market hours today. The pair fell into bear’s territory owing to Sino-U.S. trade war tensions escalating in the global market. Traders now await macro data updates for short term profit opportunities as the trading session comes to close for the week.
On The Lookout: The main focus of traders in now on UK politics given PM Theresa May’s resignation and the ensuing power struggle for the successor of said role. Aside from the political power struggle in UK and Brexit woes, the focus is on the upcoming Fed rate decision for which most investors and analysts in the market currently hold dovish expectations. However, there is a chance that the Fed could turn different way similar to ECB given Powell’s comments from earlier this week which hinted at lacked necessary dovish strength and conviction to hint at rate cut possibility. Given Trump’s comments hinting at lack of progress in high-level talks so far, tariffs on Mexico are likely to come live on Monday unless officials manage to convince the US to take alternative action during the weekend. As the trading session comes to close for the week, traders await US macro data for profit opportunities.
Trading Perspective: US Wall Street is likely to see positive price action on prevalent risk appetite in the market. US stock and index futures trading in the international market ahead of Wall Street opening saw positive activity hinting at positive investor sentiment in the market. Forex market is likely to see major pairs retain current momentum on weak USD. Traders now await macro data updates for short term profit opportunities as the trading session comes to close for the week and are unlikely to place any major bets owing to prevalent geo-political scenario which hints at the continued escalation in the near future.
EUR/USD: The pair is trading positive in the global market as Euro gained strength following ECB’s forward guidance. Draghi commented that interest rate would remain constant till 2020 or might be longer, crushing dovish expectations in the market. Further, weak USD in the market also helped Euro bulls sustain positive momentum while traders wait for macro data updates for short term profit opportunities as the trading session comes to close for the week.
GBP/USD: The pair is trading positive amid prevalent risk appetite in the market. However, gains are capped owing to political uncertainty in the UK following PM May’s resignation and Brexit woes. Weak USD continues to be the main driving force behind the pair’s positive price action for now given pressure on USD over dovish rate decision expectations. Traders now await macro data updates for short term profit opportunities as the trading session comes to close for the week.
USD/CAD: The pair is trading well inside bear’s territory as USD lost all recent gains owing to sharp gains in crude oil price action. Crude oil price gained on news that OPEC is planning to extend supply cut agreement which combined with tensions in the Middle East influenced positive momentum. Further weak USD on dovish fed rate decision expectation also supported commodity-linked currency CAD gain positive momentum. Healthy risk appetite in the market also supports CAD’s positive price action for the rest of the day.