News & Analysis

Overnight on Wall Street: Thursday 16/05/19

May 16, 2019

By Deepta Bolaky

Equity Markets

It was reported that the Trump Administration would delay auto tariffs by up to six months, which helped Wall Street to stay on the bid tone. However, we note that President Trump is also ratcheting its battle for the 5G technologies with Huawei Technologies.

Investors are moving with cautious as geopolitical risks and fundamentals are showing more weakness.

World Equity Indices (% Change)

Source: Bloomberg Terminal

Currency Markets

In the currency markets, the mixed performance of the major G10 currencies against the US dollar. The British Pound was the worst performer followed by the Antipodeans and the Euro.

Source: Bloomberg Terminal

The British Pound dropped against all major rival currencies as there are growing calls for the Prime Minister, Theresa May to quit before mid-June. In an interview on ITV’s “Peston” show, Conservative MP and Brexit campaigner Andrew Bridgen said:

“The group will ask May to step down before June 15, and if she refuses to accept their proposed timetable, the could change the rules to allow for another no confidence vote.”- (Source: Bloomberg)

So Thursday is gearing up to more pressure on the Prime Minister to step down which will likely oscillate sentiment for the local currency. On the technical side, the GBPUSD pair dropped below the 1.29, a key resistance level and is currently in the oversold territory as per the daily chart.

GBPUSD (Daily Chart)

Source: GO MT4

The Australian Dollar is dragged by weak fundamentals. On Wednesday, poor Wages & Consumer Confidence levels and Chinese data are putting downward pressure on the local currency. Markets are gearing up for the employment reports to be released today. The Aussie dollar is currently buying at 69.23 US cents.

The Euro welcomed the auto tariffs delay, which cushioned the downside pressure on the shared currency. The inflation data will drop-in on Friday.

Oil Markets

A drop in gasoline supplies as per a government report helped oil prices to extend gains despite a bearish EIA report. WTI is trading above $62.00 while Brent Crude is above in the region of $71.50.

Cryptocurrency Markets

Bitcoin is trading in the vanity of $8,200 and has gained a larger share of the crypto market. Why is Bitcoin Surging? It is hard to pinpoint the exact bullish factors behind the resurgence, but Bloomberg is talking about the “Straight Talk” and how more academics, financial professionals, institutions are taking it more seriously as an asset.

Source: Bloomberg

Key Upcoming Events Ahead

Foreign Investment in Stocks (Japan)
Eurogroup Meeting (Eurozone)
Unemployment Rate, Employment Change, Consumer Inflation Expectations & RBA’s Bullock Speech (Australia)
Housing Starts, Building Permits, Jobless Claims, and Fed Manufacturing Survey (US)

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.