Better than expected employment scenario in the USA helped improve market mood suffering from COVID-19 woes ahead of the US independence day celebrations.
Summary: Global Equities and indices are painting market in Green following cues from the US on vaccine development update yesterday. In the Asian market, the Hong Kong market shows immunity to the latest developments surrounding China’s new national security law enforcement for now. European market took cues from US & Asian counterparts and opened on a positive note. The risk-on investor sentiment was further underpinned by positive Euro area unemployment readings. Some of the major gainers in the day are from Bank, Auto, and travel sector shares.
Rare metals: Rare metals saw price edge lower albeit holding above key psychological levels. While news of COVID-19 vaccine helped risk sentiment soar, escalating COVID-19 victim count in the US kept caution in the market firmly rooted allowing the price of gold and silver to limit their declines.
Crude Oil: The price of crude oil in the international market is mostly flat despite clear positive price bias. As recent US weekly crude oil stockpile data showed signs of a sharp drop in inventory, demand-supply outlook improved in line with investor expectation for market rebalancing. However, COVID-19 woes from the US continue to affect prospects of demand outlook for now.
DXY: The US Dollar index continues to hold firm above 97 marks and is yet to move above 97.5 regions. But the strength of USD against six major rivals in the international market remains firm supported by safe-haven demand from the US as COVID-19 victim count continues to spike with each passing day.
On The Lookout: COVID-19 scenario in the USA continues to cast a gloomy outlook ahead of July 4th celebrations. The festivities this time around in the US are likely to be very muted on account of a sharp spike in the second wave of COVID-19 outbreak in the USA. While the four states continue to account for half of the total victim count, other states are also experiencing a sharp surge in victim count causing plans for economic reopening to be delayed considerably.
On the release front, US and Canadian macro data are in focus with the US calendar seeing the release of the Non-Farm Payroll and Unemployment rate while both the US and Canada sees the release of trade balance data. US jobs data which made headlines ahead of Wall Street market opening saw better than expected readings allowing US futures trading in the international market to see positive price action.
Trading Perspective: The US market is set to see Wall Street open positive on cues led by job readings and vaccine update from yesterday. However, given the fact of a long weekend in the US starting tomorrow and the impact of rising COVID-19 victim count, Wall Street indices are likely to see most of the intra-day gains erased by end of session over profit booking activity from scalpers and hedgers.
EUR/USD: The pair tested 1.13 handle on prevalent risk sentiment earlier in the day. But Euro has since lost most of the intra-day gains and is currently trading back at 1.125 handle as better than expected US job data and broad market caution over COVID-19 outbreak in the USA underpins USD bulls. Traders now await US data for short term profit opportunities.
GBP/USD: The pair is mostly trading flat in the upper half of 1.24 handle. While the pair did test 1.25 over the news of Brexit negotiations being postponed to next week, gains were reversed over a rebound in USD following US jobs data update. Traders now await US trade balance, NFP, and unemployment rate info for short term profit opportunities.
USD/CAD: The pair continues to trade flat despite USD’s growth in the broad market today. As recent US data-led market rebalancing in the crude oil market helped stabilize oil prices at key levels, the price failed to hold above 1.36 mark and consolidate around 1.350 marks. Traders now await US data for short term profit opportunities.
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