Earnings and macro data are set to keep intra-day price action highly volatile in Wall Street today.
Summary: The global stock market is seeing positive price action across major exchanges in both Asian and European market regions. News of various nations easing their lockdown measures have greatly helped improve risk sentiment.
In the European market, major indices and key stocks saw the positive activity as a slew of positive quarterly financial data, and recovery in the crude oil price helped improve risk sentiment. Major shares in the European market were testing 2-month highs as support from the government, and central bank measures to ease the COVID-19 pandemic scenario, greatly helped improve investor optimism. Gains were capped as Germany’s top court rules ECB’s government bond-buying program as partially unlawful.
Gold: Price of yellow metal retreated below $1700 handle today, losing most of the gains from previous sessions. While Sino-U.S. tensions provided safe-haven demand, improved crude oil demand outlook, positive earnings, and lockdown easing measures update helped improve risk sentiment in the market, causing demand for rare metals to decline today.
Crude oil: Crude oil is seeing positive price action on both its major indices WTI and Brent in the international market with more than 2% gain in the intra-day activity. As news of lockdown easing measures hit the headlines from the USA, Europe, and Asia crude oil demand outlook greatly improved, causing the price to see sharp upsurge with fundamental support.
DXY: The US Dollar index, which measures Greenback’s strength against six major rivals, remains steady above the mid-99 mark. But in the forex spot market, while USD held firm, improved risk sentiment underpinned market bulls helping major global currencies gain positive momentum against US Greenback across both Asian and European market hours.
On The Lookout: While lockdown measures are being eased across the globe, risk sentiment in the short term has improved given easing victim count and the death toll in the European market. But global victim count and death toll still continue to escalate with each passing day.
The US Federal Emergency Management Agency has warned the USA that easing lockdown measures could lead to further escalation in COVID-19 victim count. As per its report, the US death toll from COVID-19 will rise to 3000 a day and further 8-fold rise in infection count by June 1, 2020, in case the government reopens the economy as per its internal study. This, along with escalating Sino-U.S. tensions, keep market outlook in the red for the near future unless a medicine or vaccine is developed for COVID-19.
On macro calendar front, US calendar sees release of trade balance, API weekly oil stockpile data, Markit composite PMI, Services PMI, and ISM Non-Manufacturing PMI/Employment data while Canadian calendar sees the release of trade balance data.
Trading Perspective: US Futures trading in the international market saw positive activity as market bulls were supported by improved risk sentiment, and cues from improved crude oil price helped provide fundamental support. Wall Street is expected to open on a positive note for the day. On earnings calendar front, Wall Street sees quarterly reports from Disney, Electronic Arts, Activision Blizzard, and Beyond Meat.
EUR/USD: The pair is continuing to see dovish activity despite broad-based improvement in risk sentiment. German court’s ruling on ECB QE activity continues to keep Euro bulls under pressure. Traders now await US data for short term profit opportunities.
GBP/USD: The British Pound rode the momentum taking advantage of improved market risk sentiment to gain some positive bias. However, price movement still remains trapped within the range below the key level of 1.2500 handle, while traders await US data for short term profit opportunities.
USD/CAD: The pair is trading with clear dovish bias as a sharp spike in crude oil price action has helped CAD gain solid momentum. However, firm USD underpinned by lingering caution in the broad market kept decline capped above 1.40 handle for now. Traders now await US data for short term profit opportunities.
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