News & Analysis

Overnight on Wall Street: Wednesday 14/08/19

August 14, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

President Trump delayed the planned tariffs on some Chinese imports yesterday resetting the tone in the financial markets. Risk sentiment improved in the European and US session.

Wall Street bolstered a strong recovery with major US equity indices rising above 1.5%:

  • Dow Jones Industrial Average ended 373 points higher orc 1.5% higher at 26,280.
  • S&P 500 gained 43 points or 1.5% at 2,926.
  • Nasdaq Composite rose by 153 points or 2% at 8,016.

Currency Markets

In the FX market, the risk-on sentiment sent safe-haven currencies like the Japanese Yen and Swiss franc to the downside while the Antipodeans and Canadian dollar nudged higher. On the economic front, attention was on the US CPI figures, which came slightly better than expectations. The core CPI (YoY) rose by 2.2% compared to the 2.1% forecasted.

The Aussie dollar emerged as the best performing currency and rose above 68.00 US cents. The AUDUSD pair is currently consolidating just below the 0.68 level.

AUDUSD (Hourly Chart)

Source: GO MT4

The tariffs news prompted a sell-off in the Japanese Yen. The USDJPY pair climbed above the 106 level recovering the losses made at the start of the week.

USDJPY (Hourly Chart)


Source: GO MT4

Commodities

Oil prices staged a strong recovery on the back of positive trade news despite a bearish API reports, which shows a rise in oil stock inventories from -3.4M to -2.19M.

As of writing, WTI and Brent Crude are trading in the vicinity of $56 and $60 respectively.

UKOUSD and USOUSD (Hourly Chart)

Source: GO MT4

The daily candlestick as per the chart below shows the indecision between the bulls and the bears. Even if sellers took control, buyers stepped in to cushion the downside as investors remain cautious despite the delayed tariffs. As of writing, XAUUSD is holding to the psychological level of $1,500.

On the technical side, we identified a Bullish Harami Cross, and traders should wait for confirmation of a price move on the upside following the pattern to confirm that the price may be heading higher.

XAUUSD (Daily Chart)


Source: GO MT4

Cryptocurrencies

Bitcoin, the flagship cryptocurrency fell below the $11,000 mark on Tuesday as President Trump decided to delay the tariffs on Chinese goods. The sharp fall was accompanied by a steep rise on Wall Street. As discussed last week, it is worth monitoring the inverse relationship between the two markets in periods of market turbulence.

BTCUSD (Daily Chart)


Source: GO MT4

Key Upcoming Events Ahead

Machinery Orders (Japan)
Westpac Consumer Confidence, Wage Price Index and RBA’s Debelle Speech (Australia)
Retail Sales, Industrial Production and NBS Press Conference (China)
Gross Domestic Product (Germany)
Retail Price Index, Producer and Consumer Price Index (UK)
Gross Domestic Product and Industrial Production (Eurozone)

Thursday, 15 August 2019
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0.1 16.447 0.72 0.122 0.1 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 29.861 0 33.034 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.