Summary: Major equities, forex pairs and equity benchmark indices across Asia and European markets are trading positive today. The first quarter of the financial year 2019-20 is seeing positive price action underpinned by headlines from weekend and optimism on Sino-U.S. trade talks. The weekend saw headlines from China which stated that the state council has decided not to impose any additional tariffs on US productions during April as a token of good will in response to US decision to delay tariff on Chinese import products. Further, hopes for positive outcome that could lead to trade deal between two parties are high in the market following last week’s face to face discussion between representatives of both nations in China. Optimism surrounding Sino-U.S. trade talks and positive Chinese macro data helped sustain risk on trading activity in Asian and early European market hours. European equity market saw positive opening on cues from US Wall Street and Asian markets. However, gains were capped following worse than expected EU area manufacturing PMI and CPI updates. Risk on trading activity also underpinned positive action in Forex markets but EURO lost early gains on disappointing macro data albeit trading in green across European market hours on a flat note with positive bias.
Precious Metals: As risk appetite boomed in the global market today, both gold and silver suffered sharp declines. Positive Chinese macro data, headlines from China on delaying tariffs and optimism surrounding trade deal between two nations serve as key factors pressuring safe haven demand sustaining positive action in risk assets. But US Dollar also weakened on positive action in forex market while Brexit woes provided some level of support to precious metal bulls preventing sharp declines.
Crude Oil: Crude oil price saw sharp gains in global market today as optimism surrounding Sino-U.S. trade deal boosted prospects of more demand for Crude oil from China. This helped Crude oil stay well above $60 per barrel while support stemming from OPEC’s production and supply cut enforcement also continues to provide positive support to Crude oil bulls ensuring positive price action across Asian and European market hours.
DAX: DAX index is trading on positive note in European market today. Despite bearish influence from Brexit woes and disappointing macro data pressuring investor sentiment in European markets, positive cues from international market helped DAX open on positive note. Further, gains in auto sector shares and energy sector shares helped the index see over 1% increase in value.
Trading Perspective: Given prevalent risk on trading activity in the global market, US Wall Street is likely to see positive opening today. Risk assets across forex and equity markets will be highly active during today’s American market hours.
US Index Futures: US Index futures trading in international market ahead of American market hours saw positive price action on upbeat Chinese macro data and Sino-U.S. trade talk related optimism. Prevalent risk on investor sentiment also provides strong support to market bulls suggesting that major Wall Street indices such as S&P 500, DOW 30 & NASDAQ will see positive price action as trading session starts for first quarter of FY @2019-20.
EUR/USD: While the pair opened positive for the week and traded with bullish bias during Asian and European market hours, upside is capped near mid-1.12 handle as disappointing EU area macro data and Brexit woes continue to pressure the common currency. Investors now await US macro data updates for short term directional cues and profit opportunities.
USD/CAD: The pair saw range bound price action near Friday’s lows since trading session started for the week. Better than expected Canadian GDP data and positive crude oil price gave Loonie an upper hand on Friday resulting in sharp declines near which the pair continues to trade range bound today as USD remains weak on renewed risk appetite while CAD received support from positive crude oil price ahead of US macro data update release.