News & Analysis

Overnight on Wall Street: Wednesday 09 September 2020

September 9, 2020

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Following a public holiday on Monday for the Labour Day, the US share market extended losses into a new week. European and US stocks fell overnight as the relationship between the US and China turned sour. Ahead of the US election, markets are expecting the Trump Administration to ramp up the rhetoric to curb the relationship between the US and China.

Wall Street was in a sea of red following the rout in the technology sector. Major US equity indices shed more than 2% on Tuesday:

  • The Dow Jones Industrial Average lost 632 points or 2.3% to 27,501.
  • S&P 500 fell by 95 points or 2.8% to 3,332.
  • Nasdaq Composite erased 465 points or 4% to 10,848.


Source: Bloomberg

Currency Markets

In the FX space, the sell-off in the stock market and geopolitical tensions have put the US dollar back on the forefront. Major currencies were weaker against the greenback. The US dollar index which measures the performance of the greenback against a basket of currencies was trading firmer around the 93 level.


Source: GO MT4

The focus was also on the Pound Sterling as the 8th round of negotiations between the European Union and the United Kingdom kicked off on Tuesday. The headlines were far from reassuring which caused the GBPUSD pair to fall sharply to the 1.29 level. 


Source: GO MT4

On the economic front, it was a relatively muted calendar with trade balance and GDP figures for Germany and Eurozone respectively:

Germany’s Trade Balance

Exports, July 2020

  • 102.3 billion euros
  • +4.7% on the previous month (calendar and seasonally adjusted)
  • -11.0% on the same month a year earlier

Imports, July 2020

  • 83.1 billion euros
  • +1.1% on the previous month (calendar and seasonally adjusted)
  • -11.3% on the same month a year earlier

Foreign trade balance, July 2020:

  • 19.2 billion euros
  • 18.0 billion euros (calendar and seasonally adjusted)
GDP growth in the euro area and EU

In the second quarter of 2020, still marked by COVID-19 containment measures in most Member States, seasonally adjusted GDP decreased by 11.8% in the euro area and by 11.4% in the EU compared with the previous quarter. The figures came better-than-expected. 

Commodities

Crude oil prices fell overnight amid a risk-off environment and a stronger US dollar. With a public holiday on Monday, weekly oil reports will be issued on Wednesday and Thursday instead. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading around $36.69 and $39.71 respectively.

Gold

Gold is stuck in a range despite the risk-off sentiment dragged by a stronger US dollar. As of writing, the XAUUSD pair has consolidated around $1,930.


Source: GO MT4

By Deepta Bolaky
 @DeeptaGOMarkets

Key upcoming events

  • Westpac Consumer Confidence (Australia)
  • Consumer Price Index (China)
  • Unemployment Rate (Switzerland)
  • 10-y Bond Auction (Germany)
  • BoC Rate Statement and Interest Rate Decision (Canada)
Thursday, 10 September 2020 
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
3.686 0 0.168 0.218 0.428 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 0.079 0 3.586 0 0.064


Disclaimer:  The articles are from GO Markets analysts,  based on their independent analysis or personal experiences. Views or opinions or trading styles expressed are of their own;  should not be taken as either representative of or shared by GO Markets.  Advice (if any),  are of a ‘general’ nature and not based on your personal objectives, financial situation or needs.  You should therefore consider how appropriate the advice (if any) is to your objectives, financial situation and needs, before acting on the advice.  If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.

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