By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Geopolitical risks dampened risk sentiment, which was recenty fuelled by the prospects of dovish central banks and trade optimism last week. Wall Street started the week on a flat note as investors are gearing up for the high-stake meeting between President Trump and Xi and the G20 summit.

Major US equity benchmarks closed in negative territory with modest losses:

• The Dow Jones Industrial Average ended flat while S&P500 fell by 0.2%.
• The Nasdaq Composite dropped by 0.3%.

Energy stocks experienced the most significant percentage drop following the last-minute pullback on the airstrike last week. The  U-turn has prompted a cascade of criticism from allies and political rivals. As of writing, President Trump tweeted his replies to the critics by questioning the US protections of oil shipping routes for other countries when the US has become the largest producer of energy.

Currency Markets

In the forex markets, major currencies were stronger against the greenback. On the data front, Dallas Fed manufacturing Business Index came way below expectations at -12.1 which Chicago Fed National Activity Index came in better at -0.05. Overall the economic releases provided little support to the US dollar.

Source: Bloomberg Terminal

The Aussie dollar was among the best G10 performers against the US dollar buoyed by the comments from Governor Lowe, which expect the boost in investment spending to benefit the Australian economy.

Commodities

The geopolitical backdrop with Iran drove the rally in oil prices. WTI and Brent Crude Oil moved lower as the US does not want to start a war with Iran. President Trump pulled back the strikes on Iran at the last-minute

WTI and Brent Crude Oil is trading at $57 and $64 respectively.

UKOUSD and USOUSD (Hourly Chart)

Source: GO MT4

Gold continues to drive higher to near highest levels seen since 2013. Bulls are in control, and XAUUSD is trading at $1,425.

XAUUSD (Daily Chart)

Source: Bloomberg Terminal

Cryptocurrencies

Cryptocurrencies are buoyed by optimism of Facebook’s move. Despite having the potential of being a threat to other cryptos, Libra is viewed as the gateway to the mass adoption of cryptocurrencies. It is a net positive for the crypto-market.

Bitcoin is trading above $11,000 level.

BTCUSD (Hourly Chart)

Source: GO MT4

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