Earnings influenced momentum is seeing high risk assets trade mixed, US GDP in focus in North American trading session.
Summary: Global equity market is seeing mixed activity today as trading session comes to close for the week. On US market yesterday, Alphabet and Intel saw positive earnings reports while other major firms saw dovish earnings report. Further, ECB’s decision to keep rates unchanged despite dovish forward guidance and comments on reconsidering inflation target was viewed by US market as a disappointment. This led to investors risk appetite declining in US market hours causing all three major indices to close in red while profit booking activities on US indices hitting record highs during Wednesday’s session also boosted decline. In Asian market hours, amid dovish cues from US and lack of progress in geo-political events, major benchmark indices saw mixed outcome. European market also saw market bears pressure major indices on cues from international market and yesterday’s post ECB update proceedings but positive earnings reports from Viviendi, Pearson and SES helped European market see mixed momentum with market bulls gaining upper hand.
Precious Metals: While precious metals declined yesterday on short burst of positive activity in equity market, it has reversed all loss and is trading with positive bias in the global market as expectations for fed rate cut and mixed investor sentiment in global market underpin demand for gold and silver.
Crude Oil: Crude oil price is trading positive in both major global benchmark amid lack of fresh cues and conflicting signals. For now OPEC supply cut extension and tensions in Middle East along with decline in US inventory data provide Crude bulls with strong fundamental support for bullish price action.
AUD/USD: The pair slips below 2-week lows well below mid-0.69 handle. Firm USD in the global market today, further rate cut expectations by RBA following Lowe’s comments and mixed investor sentiment are factors weighing down AUD in the global market.
On The Lookout: As trading session heads to week’s close there are no major events which traders ‘lookout for. But USD preliminary GDP data scheduled to release today has taken center stage instead. As Sino-U.S. trade war continues to extend further without any clear resolution or progress in-sight in near future, earnings reports across the globe are starting to reflect the impact of prolonged trade war hinting at signs of global economy slowing down. Amid mixed investor sentiment, neither bulls nor bears are able to gain the upper hand in global market on conflicting and mixed signals from various major global economies. On US market, aside from GDP update, traders also wait for earnings report from Cabot Oil & Gas, McDonald’s, Twitter and Colgate-Palmolive which will provide intra-day volatility and directional trading cues in North American market hours affecting activity in Wall Street indices and tradable assets.
Trading Perspective: In forex market, major global currencies are seeing mixed activity today, but top currency pairs are trading well within familiar price levels mostly in consolidation after profit booking activity ahead of week’s closing took the wind out of market bulls. Further, firm USU also affects price action to some extent. Traders now await US data for short term profit cues and directional bias for short term trading activities. US stock and index futures trading in the internal market saw positive opening but traded with mixed momentum ahead of Wall Street opening influenced by dovish Wall Street closing yesterday and mixed earnings updates. While price activity today will see some level of volatility in the Wall Street later today upside move will be kept in check on cues from international market and divided investor sentiment.
EUR/USD: While EURO saw some gains post ECB’s decision to keep rates unchanged despite dovish forward guidance, most of the gains have already been reversed. Firm USD in the global market also weighs down EURO. Traders now await US macro data outcome for short term trading bias.
GBP/USD: Boris move asking to cancel Irish backstop backfired as EU commission members clearly refused to reopen withdrawal agreement pressuring GBP. Further firm USD also added pressure to declining GBP. Traders now await US macro data outcome for short term trading bias.
USD/CAD: The pair is seeing USD regain positive traction reversing loss incurred in previous session. It scaled new monthly highs ahead of US data release, but gains are capped owing to CAD being supported by positive crude oil price. Traders await US Prelim GDP and Canada budget balance for directional bias and short term trading opportunities.
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