US NFP and Powell speech in focus, investor sentiment turned cautious in European market as trade talk cues eased in global market.
Summary: Global equity market is seeing divided activity today as cues from easing trade war woes has evaporated from the market. Asian market saw major benchmark indices and major stocks trade positive as Chinese central bank made announcement stating that it was cutting the minimum amount of cash reserve that banks must hold for third time this year releasing US$ 126.355 Billion which can be used as liquidity and loans to improve economic conditions. However, European market saw major indices and key stocks decline as positive influence from recent development in political scenario and trade talk related developments eased off putting investors in cautious mood. In forex market, major currency pairs declined as USD firmed up ahead of US jobs data.
Precious Metals: Both Gold and Silver are trading positive as demand for safe haven assets improved in European market. Easing positive cues and increased investor caution served as positive factors boosting rare metals while firm USD caps gains.
Crude Oil: Crude oil declined as easing trade war woes and increasing cautious investor sentiment weighed down crude oil bulls. Prolonged geo-political woes caused outlook for crude oil demand to decrease resulting in decline of price in both crude oil benchmarks.
AUD/USD: The pair is trading positive today despite easing trade talk related cues as update from China on further easing measures to boost economy provided Chinese proxy with positive support. But firmer USD in the broad market and investors caution capped AUD gains.
On The Lookout: While the week saw some fresh developments in major geo-political issues, the influence from same has evaporated as investors finally clued in on the fact that these developments are nothing more than temporary stop gap measures. Prolonged geo-political issues are viewed as a sign for slowdown in global economy. In European market, news hints that ECB is currently weighing is options on stimulus measures as trade dependent economy is suffering considerably. On Brexit front, while house of lords has rejected a bill which could prevent no-deal outcome, opposition party members still act as a considerably hindrance for UK PM Boris Johnson’s measures to cut ties with EU. Further, Boris now has to wait until November for elections which is well past Brexit deadline. As his fellow countrymen fail to support him in his hardball attempt to get EU to submit, UK economy is set to suffer one sided decline while EU continues to profit on deadline extension payments.
Trading Perspective: Traders now await macro data updates for short term profit opportunities as trading session comes to close for the week. US economic calendar will see release of Average Hourly earnings, Non Farm Payrolls, Participation Rate, Unemployment rate and a speech from Fed Chair Jerome Powell later in the day while Canadian economic calendar will see release of employment change, unemployment rate and IVEY PMI during North American market hours. US stock and index futures trading in the international market saw positive outcome in Asian market hours over easing measures from Chinese central bank to boost economic conditions but gains were capped and futures turned flat in European market as investor sentiment took cautious tone in European market hours. US Dollar has firmed up ahead of NFP data update and US market is likely to see subdued opening as traders await US macro data update and Powell speech for short term trading cues.
EUR/USD: The pair is trading positive in the global market despite cautious sentiment in European market as EURO bulls still remain supported by recent development in EU area political scenario. However, gains were capped on firmer USD. Traders now await US macro data for short term trading cues.
GBP/USD: The pair is trading mostly flat as firmer USD capped GBP bulls upside potential. But GBP bulls remain well supported owing to developments in UK political scenario as opposing party law makers rejected Boris attempt for snap elections. Traders now await US macro data for short term trading cues.
USD/CAD: The pair is trading in red despite USD’s slight recovery earlier in the day. While crude oil price declined, Chinese central bank’s easing measures provided market with positive influence helping Loonie trade positive. Traders now await US and Canadian macro data and Powell speech for short term profit opportunities.
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