News & Analysis

Overnight on Wall Street: Tuesday 22/10/19

October 22, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Optimistic tones from both China and the US lifted Wall Street which helped major US equity indices to close in positive territory:

  • Dow Jones Average Industrial ended 57 points higher at 26,828.
  • S&P500 rose by 21 points and finished at 3,007.
  • Nasdaq Composite lost 74 points to finish at 8,163.

The benchmark S&P500 stock index rose above a key psychological level of $3,000 as the wave of positive trade headlines is instilling hopes of some type of a trade truce.

Currency Markets

In the FX market, Brexit and trade-related headlines dominated price action amid a relatively subdued calendar. The Antipodeans emerged among the strongest G10 currencies against the greenback boosted mostly by trade news.

The British Pound remains in the spotlight as the UK Speaker blocked a vote to hold a “yes” or “no” vote on its Brexit deal on the basis that the process will be repetitive and disorderly.

  • The government will have to push through the Withdrawal Agreement Bill which may take weeks to hold the meaningful vote.
  • Boris Johnson will attempt to get MPs to agree to an aggressive timetable on Tuesday.

The next few days will remain pivotal for the UK as it will help to shape how the UK will leave the EU and shed some light on whether there will be a general election.

The GBPUSD pair is still trading in the 1.29 level and is currently being supported by a bullish channel

GBPUSD (H4 Chart)


Source: GO MT4

The Canadian dollar was also in the spotlight. The election day was supportive of the loonie and helped the USDCAD pair to drop below the 1.31 level. However, ahead of the results, the USDCAD pair seems to be consolidating just below the 1.31 level.

USDCAD (Hourly Chart)


Source: GO MT4

Commodities

The selling pressure on oil prices continues as a fragile economic outlook is weighing on the oil market. Trade-related headlines helped oil prices to recoup some losses made during the Asian session.

Several fundamentals are driving the market sentiment for oil, and we expect traders to monitor oil reports this week to evaluate the recent surplus in crude oil inventories. As of writing, WTI and Brent Crude are trading in the vicinity of $53 and $58 respectively.

UKOUSD and USOUSD (Hourly Chart)


Source: GO MT4

The yellow metal is struggling to push higher on positive trade headlines, but the XAUUSD pair appears steady above $1,480. However, the risk that the pair will break lower is growing.

Key upcoming events

ECB Bank Lending Survey (Eurozone)
Public Sector Net Borrowing (UK)
Retail Sales and Bank of Canada Business Outlook Survey (Canada)
Existing Home Sales (US)

Wednesday, 23 October 2019
Indicative Index Dividends
Dividends are in Points
ASX200WS30US500US2000NDX100CAC40STOXX50
000.1060000
ESP35ITA40FTSE100DAX30HK50JP225INDIA50
0000009.018

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.

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