Wall Street under Pressure as Covid-19 Outbreak Escalates

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 under Pressure as Covid-19 Outbreak Escalates

June 26, 2020
COVID
Wall Street

Fears of another lockdown over the renewed escalation in the COVID-19 outbreak weighs down investor sentiment. 

Summary: Global equities are seeing mixed activity in trading session today led by multiple cues. Amid holiday in Chinese markets, the Asian market saw key indices and major stocks trade and close in red over concerns of escalating global COVID-19 outbreak.

While European markets followed suit and opened slightly lower in an earlier session, major indices and key stocks have recovered from early losses and are trading positive in mid-late trading session today. The loss at the start of the day was due to concerns about the declining prospect of economic recovery and escalating COVID-19 victim count. But the mood improved in the market with stocks from Automaker, utilities, and healthcare sector shares saw sharp gains. A sharp surge in Lufthansa stocks led by strong backing from shareholders on the bailout topic also helped improve market mood.

  Rare metals: Rare metals are seeing positive price action in the international market supported by a sharp increase in demand for safe-haven metals. Declining prospect for global economic recovery outlook following IMF forecast and escalating COVID-19 victim count keeps rare metals underpinned. But Gold is seeing mostly flat activity owing to lack of strong support to help push price above multi-year highs scaled yesterday. 

Crude Oil: Crude oil price is trading mostly positive on both WTI and Brent benchmarks in the international market today. While US stockpile data for the week hinted at build in inventory, hopes for market rebalancing itself helped improve support for crude oil bulls helping keep price above $40p/b. 

USDX:  The US Dollar index which measures the strength of US Greenback against six major global currencies is currently at 97.40-97.55 range. US Dollar grew stronger as risk aversion in the market continues to escalate over fears of another wave of global lockdown led by escalating renewed COVID-19 outbreaks across the globe. 

On The Lookout: The virus outbreak scenario in the USA is seeing sharp escalation with any and all efforts made by the government to control the outbreak so far ending in vain. The new victim cases recorded is currently crossing 34000 victims causing New York, Connecticut, and New Jersey to impose fresh 14-day quarantine on visitors coming in from US states currently experiencing a high rate of the COVID-19 outbreak.

Florida and Texas are currently the top two states seeing large victim count. On the release front, the US calendar sees Jobless claims, GDP Q1, goods trade balance, and speech from FOMC members Bostic, Kaplan, and Mester. 

Trading Perspective: US futures trading in the international market was lower on account of risk aversion led by escalating COVID-19 outbreak and spike in Jobless claims which were released ahead of market opening. Given fears of another lockdown possibility, the US market is set to see major indices open lower in North American market hours today. 

EUR/USD: The pair is trading with clear dovish bias today as an increase in USD’s strength and pressure from IMF’s revised growth forecast weighs down EURO bulls considerably. But support from the recent positive spell of EU area macro data helped keep price above the 1.1200 handle for now. Traders now await US data for short term profit opportunities. 

GBP/USD: The pair is trading mostly flat but shows clear signs of dovish bias with price mostly range-bound in the lower half of 1.24 handle. Further decline is capped as the EU finally shows signs of allowing the UK some ground in Brexit negotiations but firm USD adds pressure on GBP bulls. Traders now await US data for short term profit opportunities.

USD/CAD: The pair remains locked inside a familiar price range as CAD gained some support over positive crude oil prices in the international market today. But firm USD on account of increasing safe-haven demand keeps price steady above 1.36 handle. The price remains locked in a range near the mid-1.36 handle while traders await US data for short term profit opportunities. 

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