By Deepta Bolaky
The daily records of coronavirus infections across the US and European countries have dampened risk sentiment. Global equities ended in a sea of red with major pullbacks in the European and US markets.
Major US equity indices trade mostly in negative territory throughout the day as hopes for a stimulus relief package ahead of the US elections are fading while the virus continues to create havoc in the US.
On the earnings front, tech giants will stand out amid a busy earnings calendar. Investors are eagerly waiting for Thursday as Amazon, Alphabet Inc, Apple, Facebook and Twitter are set to report their quarterly earnings.
In the FX space, the price action was driven by the broader sentiment amid a relatively subdued economic calendar on Monday. The markets were rattled by US election-related uncertainties, COVID-19 daily records in Europe, and Brexit negotiations. Major pairs remain within familiar levels given the indecisiveness and lack of clarity in the markets.
On the economic front, IFO surveys in Germany came out mixed:
The EURUSD pair edged lower but held above the 1.18 level following mixed IFO surveys and the current risk environment:
Source: GO MT4
In the US, the Chicago Fed National Activity Index which is the monthly index designed to gauge overall economic activity and related inflationary pressure suggests Slower, but still slightly above-average growth in September. The index was up by 0.27 in September, down from +1.11 in the month of August. In the housing market, New Home Sales (MoM) came below forecasts (1.025M) in September at 0.959M.
Crude oil prices were underpinned by both the demand and supply side last week. The demand side narrative continues to remain the major concern as various types of curfews and social distancing measures are threatening to paralyse activities again. Traders will likely continue to monitor the weekly oil reports for fresh trading impetus. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading at around $38.64 and $40.46 respectively.
The precious metal remains relatively unchanged for the day as traders await for the next catalyst. With no US stimulus in sight, the XAUUSD pair is struggling to advance higher despite the second wave of virus hitting hard certain countries. As of writing, the XAUUSD pair is trading around $1,902.
Source: GO MT4
By Deepta Bolaky
Key upcoming events
|Wednesday, 28 October 2020
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