Earnings from Fox news, Activision, Monster beverage in focus alongside stimulus proceedings and Tiktok US operations sales talks.
Summary: European market today saw mixed activity amid earnings led cues. While there was brief relief in a rally yesterday led by Chinese data-led cues, disappointing earnings reports comes as a major blow. The Liquor giant Diageo Plc and Pharmaceutical giant Bayer saw their earning report post large loss.
Covid-19 led lockdown measures has had a serious impact of the sale of alcoholic beverages. At the same time, Bayer Inc saw its losses stemming from lawsuits and impact of the covid-19 pandemic on its sales activities resulting in a loss worth more than 9.5 Billion. These factors caused both the firm’s stock values to plummet by 5% & 3% respectively, shortly after the trading session began in European market hours. While oil giant BP also saw its earnings reports post-loss, the much-anticipated move by the firm to cut back on its dividends helped improve sentiment surrounding the stock allowing it to post some gains and limit the decline of key benchmark indices.
Rare metals: Rare metals are trading with clear positive bias as China-U.S. trade war gains a new fact in the form of social media giant Tik-Tok. With tensions on the rise adding pressure to covid-19 impact gold finally breached $2000 handle while silver is also trading with more than 2% gains.
Crude Oil: Crude oil price continues to trade within familiar price levels after the previous session’s losses. Concerns surrounding glut scenario as OPEC gears up to increase production continues to weigh oil bulls causing short-medium term outlook to remain dovish.
USDX: The US Dollar index, which measures the strength of US Greenback against six major rival currencies consolidated near previous session highs. USD rebound yesterday in global market albeit with limited gains and the index is back above the 93 mark post which it has consolidated its hold in the lower range of the 93 level.
On The Lookout: China-U.S. tensions gain new peak as China warns that it will never allow theft of its intellectual property given US President Trump’s recent efforts to force social media giant Tik Tok to sell its US operations to any US-based tech giant while providing part of sales fund to US treasury. This move has caused tensions to reach peak levels last seen during a similar incident which focused on Huawei.
Aside from this, the focus remains on earnings and macro data updates. On earnings calendar front, Wall Street sees report from Baidu, Activision Blizzard, Monster Beverages, Emerson, Microchip, Vulcan Materials, Fox Corp A & B, FMC, Gartner, Wynn Resorts, Devon Energy and Ralph Lauren A. On the macro data front, there is the release of US factory orders data and API weekly crude oil stockpile data.
Trading Perspective: US Futures trading in the international market were dovish on account of rising tensions surrounding Tik-Tok sales led US-China tensions. Given recent stalemate surrounding Stimulus talks wall street is expected to open flat but dovish influence is likely to be limited as covid-19 victim count has remained on the lower end for the last two days.
EUR/USD: The pair which declined yesterday on USD rebound managed to cap loss at 1.1720 mark post which EURO is attempting to regain 1.18 handle once again. Traders now await US data for short term profit opportunities.
GBP/USD: The pair still retains some level of dovish bias which began yesterday when rally driven by USD rebound finally put an end to GBP’s recent streak of a sharp bullish rally. The pair fell below 1.30 handle but rebound back above 1.30 handle and is currently holding firm around the 1.305 mark as US consolidated post short rebound. Traders now await US data for short term profit opportunities.
USD/CAD: The pair is trading with clear dovish bias and price fell back below 1.34 mark as USD consolidated post short rebound while crude oil price recovered some of the previous session loss. Traders now await US weekly API crude oil stockpile data for short term directional cues.
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