Disney Gains boost premarket US futures, Stimulus talks in focus.
Summary: European market today saw major indices and key equities open on a positive note with overall market momentum gaining fundamental support from the stimulus and earnings reports.
While escalating covid-19 woes and tensions with China and USA remain a matter of concern for investors, fund inflow into the market from European Union’s covid-19 support package and better than expected earnings reports helped improve risk appetite in the market. Stimulus led momentum helped push shares from sectors with most impact from economic downturn post visible gains today. Gains were primarily visible across travel, mining and industrial sector companies.
At the same time, positive earnings from multinational supermarket chain operator Ahold Delhaize, German real estate firm Vonovia and Bank of Ireland helped push key benchmark indices on solid bullish price run.
Rare Metals: Having conquered fresh yearly highs above the $2000 mark, gold is currently consolidating its hold over key support level before preparing for the next leg of positive price run. Meanwhile, silver – the poor man’s gold continues to post solid gains in the market with more than 2.5% intra-day gains and price firmly rooted above the 26 mark on escalating covid-19 woes and China-U.S. tensions.
Crude Oil: Crude oil market saw the price of both Brent and WTI futures post some level of gains as API weekly stockpile data from the USA showed better than expected decline in inventory stockpile helping ease concerns of glut scenario in the physical market. Focus now shifts to EIA weekly inventory for short term directional cues.
DXY: The US Dollar index fell below the 93 mark yet again and posted fresh 2020 lows as news of stimulus talks taking a positive turn and pressure from covid-19 woes continued to pressure the US Greenback. This caused USD to lose most of the gains made in its rebound earlier this week causing it to lose ground against global rivals.
On The Lookout: Main focus remains on stimulus proceedings as headlines from the USA yesterday hinted that talks are finally beginning to proceed in a favourable direction for 5th stimulus package related discussion despite senate members still remaining at odds.
At the same time, another update regarding China-U.S. relations came as a refreshing change to the market. US and China are expected to meet together later this month during which they are expected to review phase one trade agreement which was signed in January this year during which recent matters which caused tensions to escalate and conditions mentioned in agreement which have not been fulfilled yet due to covid-19 impact are expected to be addressed by both parties.
On the earnings front, US market sees report from Fiserv, Metlife, American Water Works, Moderna, Western Digital, Century Link, Discovery A, Lincoln National, Federal Realty, Nielsen and Marathon Oil. On macro calendar front, Canadian calendar sees the release of trade balance data while US calendar sees release of trade balance, ADP Non-Farm Employment change, EIA weekly US crude oil stockpile report, Markit Composite & Services PMI and ISM Non-Manufacturing Employment/PMI data.
Trading Perspective: US futures trading in the international market displayed positive activity on stimulus cues. Disney stock value in premarket activity shot up as news of Mulan directly moving to release in Disney+ streaming platform came as welcoming update. Gains in energy sector shares also helped premarket activity which hints at a positive opening in Wall Street today.
EUR/USD: The pair conquered trades with a clear positive note and is well on its way to scale 1.19 handle as broad market USD weakness underpins Euro bulls yet again. But disappointing Euro area macro data capped scope of Euro’s gains. Traders now await US data for short term profit opportunities.
GBP/USD: The British Pound has managed to stay above 1.31 handle and even scaled 1.316 on USD weakness driven rally. But disappointing UK macro data pressured GBP causing it to stagnate slightly lower to the 1.314 mark while traders await US data for short term profit opportunities.
USD/CAD: The pair is trading with clear dovish bias as a rally driven by a rebound in the crude oil price to multi-month highs pushed the price below the 1.324 mark . Broad market USD weakness also aids rally, allowing price to consolidate around mid-1.32 levels while traders await the fresh US and Canadian macro data for short term profit opportunities.
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