
Equity markets rebound, geopolitical tensions, and the US dollar rallies, what moves the indices, FX, and commodities markets today?
Equities
Global stock
markets rebounded on Tuesday, yet the market’s fundamental has not changed. This
move is likely technical as some traders seemed to exit their short positions. The
market risk appetite is still weak, and the US dollar continues to gain
territory.
The US-China
tensions continued as the US president demanded to hold Beijing accountable for
having unleashed Covid-19, while China accused him of lying.
Stock Market |
Change % |
+0.6% |
|
+0.5% |
|
+1.0% |
|
+1.2% |
|
+0.1% |
|
+0.7% |
|
-0.6% |
Currencies
The US dollar
rallied on Wednesday against a basket of currencies due to Coronavirus unease in
Europe and the UK , and on the Fed member Evens statement that the Fed could
raise the US interest rates before inflation starts to average 2% however, he
warned of a slower recovery if the Congress fails to pass an additional fiscal stimulus
package.
The US Dollar index has risen to an eight-week high at
94.22. The index broke above the neckline of the inverted head and shoulders at
93.50 eyeing a test of 95.50. On the
other hand, EUR/USD changed its outlook to negative and provided two
bearish signals, the first was breaking below the neckline of the head and
shoulders pattern located at 1.1775, and the second was closing below 1.1713. As
a result, the pair may press towards the 1.1500 threshold.
GBP/USD
retreated on Tuesday and closed below 1.2773 and changed its technical outlook
to negative. The pair may press towards 1.2505.
Commodities
The oil price
slipped due to a stronger US dollar price and reports of an increase in the US
crude stockpiles adding to that lower global demand caused by coronavirus
concerns.
Brent
oil closed below $42.50 hinting that the price may press towards $39.60, while
the US Crude could fall towards $38.37.
The Gold price gave a negative signal
after closing on Monday below $1,921. The yellow metal continued losing value
on Tuesday eyeing a test of the low end of the current $1.921- $1,859 trading
zone.
Looking Ahead
Markets
expect the PMI flash numbers for September in the Eurozone, the UK, and the US respectively
at 12:00 PM, 12:30 PM, and 5:45 PM (UAE time) then eyes will be the US oil
inventories and the Fed chair testimony before the US congress at 6:30 PM,
finally Fed members Evan and Quarles speak at 7:00 PM and 10:00 PM.
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