By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Broad-based recovery on Wall Street on Tuesday. Major US equity benchmarks posted more than 2% gains for the first time since early January 2019.

Source: Bloomberg Terminal

After Fed’s Bullard speech, the Chairman of the Federal Reserve, Jerome Powell opens doors for a rate cut which bodes well with the markets.

Investors also saw a glimpse of hope as it was reported that Republican senators are voicing out against the tariffs on Mexico.

• The Dow Jones Industrial Average and S&P500 rose by 2.10%.
• The Nasdaq Composite finished higher by 2.65% led by a rally in tech stocks.

Currency Markets

The dovish Fed and tariffs talks drove the price action in the forex market. Traders moved away from safe-haven currencies. The US dollar and Japanese Yen were among the worst performing currencies, and major currencies were firmer against the greenback.

Source: Bloomberg Terminal

The Euro lost upside momentum in the European session on weak inflation data. A fall in the unemployment rate from 7.7% to 7.6% was overshadowed by preliminary CPI and Core CPI figures which came below expectations at 1.2% and 0.8% respectively.

The EURUSD pair bounced back on Jerome Powell’s speech and the growing expectations that the Fed will cut interest rate this year. The pair is currently trading at 1.1254.

The British Pound was better bid on Tuesday. The optimism over the UK-US trade relations, speculations of a Fed rate cut, and the unison in agreeing on a potential candidate to replace the Prime Minister are the main factors supporting the local currency.

The GBPUSD pair is currently trading in the 1.2702 level.

The Aussie dollar was little unchanged as the rate cuts, and comments from Governor Philip Lowe were largely priced-in. However, despite the latest warning from the World Bank on global growth, the Aussie dollar remains resilient at just below 0.70 US cents.

Traders await the latest GDP figures scheduled to be released this morning to weigh the impact of slowing global growth.

Commodities Market

Oil prices remain fragile due to the uncertainties on the demand outlook. The pledge made by the Saudi to rebalance the markets cushioned the slide in WTI and Brent Crude.

However, API weekly crude oil stock climbed from -5.265M to 3.545M, which could add further downward pressure on oil prices. The next significant report will be the EIA crude oil sock change, which will be released in the US session today.

WTI clings to $53.12 while Brent Crude is trading in the vicinity of $61.21.

UKOUSD and USOUSD (Hourly Chart)

Source: GO MT4

The rally in Gold has halted as risk sentiment improved overnight, and the equity market nudged higher. XAUUSD was practically unchanged at $1,325.

XAUUSD (Daily Chart)

Source: GO MT4

Cryptocurrencies

Crypto Markets were in a sea of red since the beginning of the week. Tuesday saw another bid drop for several digital currencies – Bitcoin fell more than 10% to a low of $7,474.

Given that the markets moved substantially lately, such retracement in the crypto space is inevitable.

BTCUSD (Hourly Chart)

Source: Bloomberg Terminal

Key Upcoming Events Ahead

Gross Domestic Product (Australia)
Caixin Services PMI (China)
Markit PMI Composite and Retail Sales (Eurozone)
ADP Employment Change, Markit PMI Composite, Services PMI, ISM Non-Manufacturing PMI and Fed’s Beige Book (US)

Thursday, 06 June 2019 Indicative Index Dividends Dividends are in Points
ASX200	WS30	US500	US2000	NDX100	CAC40	STOXX50
0	0	0.772	0.179	1.286	0	0
ESP35	ITA40	FTSE100	DAX30	HK50	JP225	INDIA50
0	0	7.166	0	4.064	0	0

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.