News & Analysis

Overnight on Wall Street: Tuesday 10/09/19

September 10, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Wall Street ended mixed on Monday. After opening modestly higher, major US equity indices struggled to find a firm upside direction as losses in technology and health care stocks outweighed gains in financials.

  • Dow Jones Industrial Average ended 38 points higher at 26,836.
  • S&P 500 ended flat.
  • Nasdaq Composite fell by 16 points to 8,087.

Following the moves in the European bond markets, the US Treasuries yields were also higher as investors await for the central banks to provide guidance following the mixed bag of economic data.

Currency Markets

Chinese trade balance over the weekend has initially weighed on the currency market. However, the improvement in risk appetite reversed the dynamics and safe-haven currencies like the Swiss franc and the Japanese Yen were seen trading lower. Major currencies were mixed against the US dollar. Commodity currencies were stronger among the G10 lifted by a price rally in oil, iron ore and base metals.

Much attention remains on Brexit as the Prime Minister is reluctant to go to Brussels to negotiate an extension. Boris Johnson lost a second vote to call for a general election and moves to prorogue Parliaments which means that the MPs will not return to the House of Commons until 14 October.

The GBPUSD pair rose on the rejection of the second bid for an early general election. A series of economic data in July also supported the pair:

  • Industrial Production (MoM) rose by 0.1%
  • Manufacturing Production came (MoM) better than expected at 0.3%
  • Gross Domestic Product (MoM) at 0.3%

The renewed weakness in the US dollar also helped the pair to rise above the 1.23 level at fresh multi-week tops.

GBPUSD (Daily Chart)


Source: GO MT4

Commodities

The oil market also cheered the upbeat mood in the markets. While the demand side remains fragile, the supply side factors are more supportive.

As of writing, WTI and Brent Crude is trading at the highest since July in the vicinity of $58 and $62.

UKOUSD and USOUSD (Hourly Chart)


Source: GO MT4

Despite the improvement in risk sentiment, Gold edged higher and traded at a high of $1,557   on Wednesday. The dismal ISM Manufacturing PMI figure continues to weigh on the markets.

Risk sentiment has improved as certain significant geopolitical risks have eased and China has announced more stimulus to support its economy. Traditional safe-havens like Gold were among the worst performers on Monday. The XAUUSD pair dropped below the $1,500 psychological level.

XAUUSD (H4 Chart)


Source: GO MT4

Key upcoming events

Electronic Card Retail Sales (New Zealand)
CPI, PPI, and Foreign Direct Investment (China)
Claimant Count Change, ILO Unemployment Rate and Average Earnings (UK)

Wednesday, 11 September 2019
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
1.7 0 0.152 0.093 0.785 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 0 0 0.808 0 0


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