Wall Street to Rebound as Second-Wave Fears Ease During the Weekend

Karthik Subramanian

Karthik Subramanian has been a professional trader and fund manager over the last 18 years. He is basically a software developer who made the transition to financial domain around 18 years back as the attractiveness of the financial markets proved too much for him. He lives in Chennai in India along with his wife and son. He began his career as a software developer in 1999 and then gradually moved into the financial industry as he began trading stocks in his pastime. He then moved into the financial markets full time and then shifted his focus to the FX markets due to the liquid nature of these markets. Since then, he has been trading FX diligently and his favourite pair are the EURUSD and EURJPY. Over the last couple of years, he has found blockchain to be of high interest and considering his background in software and finance, he has since assembled a team of highly talented developers who have since worked on a variety of projects like crypto exchanges and blockchain architecturing. Now, he balances his time between trading and commenting on both the FX and crypto markets. He has worked with many publications including FX Street and Finance Magnates, which has helped him gain experience and also recognition across the industry. He loves to write and this passion has helped him to reach out across the FX and crypto industry. Right now, he works on his pet projects in the FX and crypto industry and spends his time writing and managing his blockchain team and helping it to reach higher.

global equities

Wall Street to Rebound as Second-Wave Fears Ease During the Weekend

June 30, 2020
ease
COVID-19 victim counts ease

Easing virus victim count, hopes for economic recovery helped improve market risk appetite. 

Summary: Global equities see mixed price action on key indices and risk assets at the start of the week. While concerns of another major COVID-19 breakout and bleak economic outlook kept key risk assets in the Asian market under pressure, the European market was off to a positive start for the week. Easing concerns of major impact from the second wave of the COVID-19 outbreak was eased, following ECB Lagarde’s comments last week, stating that worst was over at least for the European market.

The mood in the European market remained well in favor of risk on the activity as hopes for economic recovery was well supported by ECB’s relief package. Wirecard’s announcement stating that it will continue its business operations as usual despite filing bankruptcy last week helped the share gain more than 95% of its losses from the previous week, also adding strength to risk on momentum in the European market. 

Rare Metals: Rare metals are seeing positive price action in the international market today aided by increased demand from across all key global market regions. While risk sentiment boomed in the European market, bleak data and high victim count from Asian market regions helped fuel demand for safe-haven assets keeping price near monthly highs. 

 Crude Oil: Crude oil price is seeing positive price action across both major benchmarks WTI and Brent with both indices and futures posting solid gains. As risk sentiment improved in the European market with the outlook for economic recovery seeing solid progress, demand outlook improved, allowing futures of both major benchmarks to see nearly 1.5% spike in price today. 

DXY: The US Dollar index, which measures the strength of the US Greenback against a basket of rival global currencies, remains mostly flat but steady above the 97 handle. While risk sentiment improved in the latter half of the day, firmly rooted caution in the global market led by escalating COVID-19 victim count keeps USD firmly well supported for the moment. 

On The Lookout: Covid-19 victim count related headlines remain the main focus of investors as the count across the globe continues to escalate with each passing week. On the release front, the macro calendar schedule remains, sees the release of Pending Home Sales data in the US market while the Canadian calendar sees the release of Building Permits and RMPI. Facebook is facing a boycott issue from major firms over issues with rapidly spreading hate speech & discrimination. The proceedings of US measures to control the COVID-19 outbreak will also remain the focus of investors. 

Trading Perspective: The US market is set to see positive price action as hopes for economic recovery and declining COVID-19 victim count improve risk sentiment in the market. US futures trading in the international market saw positive price action as the weekend saw the COVID-19 count of the USA decline steadily compared to the previous week. 

EUR/USD: The pair continues to trade positive and holds firm above 1.12 handle and remains mostly steady around 1.1240 handles as German macro data saw better than expected readings providing Euro bulls with positive fundamental support. But lingering safe-haven demand underpins USD preventing pair from seeing further gains. Traders now await US data for short term profit opportunities.

GBP/USD: The pair is trading with clear dovish bias as concerns over escalating COVID-19 victim count in UK and concerns of Brexit proceedings weighed down GBP.  Further, pressure from USD also weighed down the pair causing the price to decline below 1.23 handle keeping price and stabilize near mid -1.22 handle. Traders now await US data for short term profit opportunities. 

USD/CAD: The pair is trading flat, lacking directional bias as both USD and CAD remain fundamentally supported in today’s rally. Positive crude oil price aids Canadian Loonie while lingering safe-haven demand underpins USD bulls. However, pressure from CAD caused the price to decline below the 1.37 mark. Traders now await the US and Canadian macro data for short term profit opportunities. 

Please feel free to share your thoughts with us in the comments below.

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