Initial jobless claims, unemployment rate, stimulus talks in focus.
Summary: European market is seeing mixed activity across key equities and indices today led by earnings cues. But macro data update helped prevent sharp losses. BOE economic recovery forecast also cast a dovish shadow on the European market. Bank of England in its recent monthly interest rate decision meeting kept the interest rates unchanged. However, in its press conference, it mentioned that economic recovery in the UK from the covid-19 pandemic hit is expected to take until the end of 2021 and this caused a massive wave of dovish influence across the European market.
Further, dovish earnings results from European airline operator Lufthansa, commodities trading firm Glencore, insurance service provider and clothing and shoemaker Addidas came as an additional dovish influence. The only positive light in market today which helped cap loss was from macro data front as Germany saw better than expected factory orders data and Italian industrial production data while the UK also reported a positive construction PMI data.
Rare Metals: Gold and silver continue to trade positive and post fresh record highs with each passing day as covid-19 woes, stimulus talk proceedings and China-U.S. tensions fuel demand for safe-haven metals. Weaker USD in the global market also helped provide some support to rare metals rally. Gold is currently consolidating hold near fresh record highs while silver scaled $28 handle.
Crude Oil: Crude oil market is seeing the price of both WTI and Brent futures maintain a Rangebound and consolidative tone today. As recent US weekly API & EIA stockpile data saw a sharp drop in the stockpile, oil price touched fresh multi-month highs in trading session yesterday. But, claims from several analysts stating that numbers in reports from the last couple of week don’t match has caused concerns of actual physical market supply & demand outlook causing price action to enter consolidative pattern today.
DXY: The US Dollar index continues to remain near monthly lows and is well-rooted into the 92 mark as pressure stemming from multiple fronts prevent USD from capitalising on broad market safe-haven demand. This, along with supportive cues from the local market, allows rival currencies to post huge gains against USD in the global forex market.
On The Lookout: There is not much to look out for on North America market hours today aside from usual banter pertaining to 5th Stimulus package and daily macro data. While earlier updates hinted at talks taking a favourable direction, latest updates reaffirmed that deadlock in talks is yet to see any major breakthrough.
On earnings calendar front, Wall Street sees report from T-mobile US, American electronics power company, Motorola, FleetCor, Hilton Worldwide, ViacomCBS, Norton Lifelock Inc, Quanta Services, News Corp, Kohls Corp, Huntington Ingalls Industries, Norwegian Cruise Line and Trip Advisor. On the macro data front, US calendar sees the release of initial Jobless claim, unemployment rate and continuing jobless claims.
Trading Perspective: Unemployment rate and Jobless claims data in focus. Recent Reuters report hinted at US job cuts jumping 54% in July. Given the end of support for unemployed from covid-19 initial government stimulus measures and lack of progress in 5th stimulus package talks, USD is likely to remain weaker. Futures trading in the international market were flat, which suggests Wall Street is up for softer opening note today.
EUR/USD: The pair is firmly rooted around mid-1.18 handle having declined post scaling 1.19 handle in the previous session. Positive macro data in the EU adds strength to EURO bulls but lacks impact to trigger a bullish rally. Broad market USD weakness also underpins current price momentum, which allows pair to gain another shot at 1.19 handle. Traders now await US data for short term profit opportunities.
GBP/USD: The British Pound is trading positive as BOE kept interest rates unchanged and upgraded its 2020 GDP forecast. Positive constructions PMI data in the UK amid weaker USD in the global market was also highly welcomed, but economic recovery forecast cast a shadow preventing huge gains. Traders now await US data for short term profit opportunities.
USD/CAD: The pair is trading flat as both currencies lack directional bias. Crude oil weekly data record from the US seems to mismatch with previous reports as per analyst claims causing the price of oil to enter consolidation while USD remains weaker on pressure from geopolitical and economic woes. Traders now await unemployment claims for short term directional cues.
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