News & Analysis

Overnight on Wall Street: Wednesday 26/02/2020

February 26, 2020

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Coronavirus is an evolving risk acting as the tip of the iceberg which is triggering a massive sell-off in an overheated market. Global stocks are in a sea of red due to fears around the wider spread of the virus across borders.


Source: Bloomberg Terminal

Major US equity benchmarks fell by around 3% again on Tuesday. All three indexes have erased all gains made since the beginning of the year:

  • Dow Jones Average Industrial fell by 879 points to 27,081.
  • S&P500 ended 3.03% lower at 3,128.
  • Nasdaq Composite lost 256 points to finish at 8,966.

Currency Markets

In the FX space, safe-haven currencies like the Japanese Yen and Swiss franc. The US dollar struggled to keep the bid momentum as the movement in the bond market is forcing investors to rethink the next step of the Federal Reserve.

US Dollar Index

The US dollar fell for a third consecutive session. The Euro which has the biggest weightings in the index continues to gain upside traction. At the same time, the demand for bonds is indicating the concerns of investors towards the local economy.  As of writing, the index dropped slightly below the 99 levels.

US Dollar Index (Daily Chart)


Source: GO MT4

Oil & Gold

The virus risks continue to exercise selling pressure on oil prices. AA better-than-expected API report showing a lower build in US crude oil compared to the previous report has cushioned the fall. As of writing, WTI and Brent Crude were trading in the $50 and $54 levels.

UKOUSD and USOUSD (Hourly Chart)

Source: GO MT4

Gold erased Monday’s gains despite a weaker dollar but remained in elevated levels. The recent rally in the yellow metal has pushed the XAUUSD pair in overbought territory and the correction was somewhat expected. A fragile environment continues to prevail in the financial markets which could help the precious metal to resume its rise.

XAUUSD (Hourly Chart)


Source: Bloomberg Terminal

Key Upcoming Events

ZEW Survey – Expectations (Switzerland)
New Home Sales (US)
Trade Balance and Exports (New Zealand)

Thursday, 27th February 2020
Indicative Index Dividends
Dividends are in Points
ASX200WS30US500US2000NDX100CAC40STOXX50
2.4364.7480.6190.2580.6800
ESP35ITA40FTSE100DAX30HK50JP225INDIA50
0027.767073.89115.8590


Disclaimer: Articles and videos from GO Markets analysts are based on their independen
t 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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