News & Analysis

Overnight on Wall Street: Wednesday 15/05/19

May 15, 2019

By Deepta Bolaky

Equity Markets

Markets turned positive on Monday in the European and US session. President Trump’s change in tone lifted sentiment on Wall Street despite the contradicting tweet in response to the rumours of a big sale of US Treasuries.

While the US President is counting on the Fed to response to China, the other economies are watching with angst as there are concerns that such actions can disrupt international economic diplomacy.

Major US benchmarks on Wall Street finished the day in the black lifted mostly by the technology sector.

World Equity Indices (% Change)

Source: Bloomberg Terminal

Currency Markets

In the currency markets, the performance of the major G10 currencies against the US dollar was mixed ads the greenback lost some haven flows.

Source: Bloomberg Terminal

The Australian Dollar ended the day on a flat note. The US dollar retreated, and there were more optimistic trade comments making headlines yesterday which are putting a bottom to the downside. However, fundamentals are weak, and traders are looking for bullish factors to push the local currency to the upside. Westpac Consumer Confidence and Wage Price will be the key events for AUD pairs in the Asian session.

The British Pound was on the offer yesterday following negative Brexit headlines and mixed unemployment report. Despite unemployment ticking lower to 3.8%, it was not enough to convince bulls to step in as the Average Earning including bonus came below expectations at 3.2%. As of writing, the GBPUSD pair is trading at 1.29063.

GBPUSD (Daily Chart)

Source: GO MT4

The Euro was also unable to edge higher against the US dollar despite positive trade comments. The ZEW Survey – Economic Sentiment came below expectations at -1.6 which dampened sentiment for the shared currency.  The EURUSD pair dropped to a low of 1.2012 yesterday.

Commodities Markets

Geopolitical tensions are on the rise in the Persian Gulf. Oil prices found some support from the OPEC regarding the reduction of oil production during last month. However, further comments from Iran and the API reports added downside pressure.

USOUSD and UKOUSD (Hourly Chart)

Source: GO MT4

Gold powered higher just above $1,300 which is a familiar support/resistance level. Risk sentiment was buoyed by Trump’s shift in tone on the trade talks, but a weaker US dollar helped the XAUUSD pair to plummet. However, if the risk-on mood persists, gold might drop below $1,290.

Key Upcoming Events Ahead

Westpac Consumer Confidence & Wage Price Index (Australia)
Retail Sales, Industrial Production & NBS Press Conference (China)
Gross Domestic Product (Germany)
Gross Domestic Product (Eurozone)
Retail Sales & Industrial Production (US)
BoC Consumer Price Index (Canada)

Thursday, 16 May 2019
Indicative Index Dividends
Dividends are in Points


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