News & Analysis

Overnight on Wall Street: Thursday 13/06/19

June 13, 2019

By Deepta Bolaky

Equity Markets

Investors switched their focus back to the US-China Trade row. President Trump is still sending conflicting messages about the trade deal, keeping the markets on edge. Muted CPI figures raised the expectations of future rate cuts but did little to lift risk sentiment on Wall Street.

The risk-off sentiment started in the Asian trade and carried through in the European and US session.

Major US equity benchmarks ended in the red on Wednesday:

  • The Dow Jones Industrial Average and S&P500 dropped 0.2% respectively.
  • The Nasdaq Composite finished lower by 0.4%.

Currency Markets

The pullback in risk assets favoured safe-haven currencies like the US dollar and Japanese Yen.

Source: Bloomberg Terminal

The US CPI figures were the main economic releases in the US session. The headline CPI dropped from 2.0% to 1.8%, which is more than the 1.9% forecasted figure. The soft data increased the chances of the Fed cutting interest rate.

The US dollar fell momentarily but pushed higher boosted by safe-haven flows. Major currencies were weaker than the greenback and the Aussie dollar emerged as the worst performer.

The British Pound failed to hold onto gains made from the wages report due to the ongoing Brexit and political uncertainties in the country. The GBPUSD pair dropped back below 1.275 level, and Pound is currently at 1.26 US cents.

Commodities Market

The rout in the oil markets continues as the bearish reports added more downward pressure. EIA Crude oil inventories increased by 2.2 million barrels from the previous week. WTI and Brent Crude slide further and are currently trading at $51.36 and $59.37 respectively.

UKOUSD and USOUSD (Daily Chart)

Source: GO MT4

As risk sentiment soured, the yellow metal picked safe-haven flows. XAUUSD push higher to $1,332.

XAUUSD (Daily Chart)

Source: Bloomberg Terminal


Did Bitcoin pick some haven flows as well?

Bitcoin broke a key resistance level – $8,000 as the bulls came back which saw BTCUSD jumped by more than $300.

Key Upcoming Events Ahead

Foreign Investment in Stocks (Japan)
Eurogroup Meeting and Industrial Production (Eurozone)
Consumer Inflation Expectations, Unemployment Rate, and Employment Change (Australia)
Foreign Direct Investment (China)
SNB Interest Rate, Monetary Policy Assessment, Financial Stability Report and Press Conference (Switzerland)
Harmonized Index of Consumer Prices (Germany)
Jobless Claims (US)

Friday, 14 June 2019
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0 11.055 0.389 0.104 0 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 0 0 6.505 0 0
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