News & Analysis

Overnight on Wall Street: Thursday 10/10/19

October 10, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Wall Street ended in positive territory despite conflicting trade headlines. It was initially reported that a partial trade deal is still on the table despite the inclusion of top Chinese artificial intelligence startups in a trade blacklist. The optimism on trade talks helped the major US equity indices to finish in the green for the first time in 3 days:

  • Dow Jones Average Industrial ended 0.7% higher at 26,346.
  • S&P500 rose by 0.9% and finished at 2,919.
  • Nasdaq Composite finished 1% higher at 7,904.

However, in a late statement, it was reported that Beijing has lowered its expectations for the US trade talks after the blacklist.

Currency Markets

In the FX market, the trade talks and the FOMC minutes were the main market drivers. The FOMC minutes show that the policymakers are mostly pricing-in the risks coming from abroad and do not see any weakness in the domestic economy that could lead to a recession. It should also be highlighted that the minutes are outdated and the recent disappointing data were not taken has fueled expectations of a rate cut recently.

Major currencies were mixed against the US dollar.

As the deadline for Brexit is nearing, the British Pound remained under pressure amid fading hopes for a Brexit deal. The currency swung up and down on the news that the EU is offering options on the Irish border which was later denied.

GBPUSD (Hourly Chart)


Source: GO MT4

Commodities

In the oil market, the fundamentals are driving prices in the opposite direction as traders are weighing the supply disruptions and the demand backdrop. The initial optimism from trade headlines helped the oil market to gain upside traction despite rising US crude oil stocks reported by the EIA.

As of writing, trade headlines coming from China have raised doubts over the trade talks scheduled to take place on Thursday and Friday. WTI and Brent Crude retreated from highs and are trading on the downside in the vicinity of $51 and $58 respectively.

UKOUSD and USOUSD (Hourly Chart)


Source: GO MT4

Amid conflicting trade talks, traders are seeking safety with safe-havens. The price of gold was relatively unchanged overnight, but we are seeing investors piling up in the yellow metal after the late statement on trade coming from China last night.

As of writing, the XAUUSD pair is trading higher at $1,516.

XAUUSD (3-Day Chart)


Source: Bloomberg Terminal

Key upcoming events

Foreign Bond and Stocks Investment, and Machinery Orders (Japan)
Consumer Inflation Expectations and Home Loans (Australia)
Trade Balance (Germany)
Foreign Direct Investment (China)
Manufacturing & Industrial Production, and Gross Domestic Product (UK)
ECB Monetary Policy Meeting Accounts (Eurozone)
Jobless Claims, and Consumer Price Index (US)

Wednesday, 09 October 2019
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0 0 0.28 0.032 0 0 0.93
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
12.789 0 0 0 0 0 0

Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.