Death toll spike keeps rebound activity under check. Stimulus measures related headlines to dictate overall price activity.
Summary: As the trading session opened for the week, Asian markets saw major indices and key stocks across top Asian exchanges rebound from previous week’s lows. The rebound was primarily influenced by hopes and expectations for global policy stimulus measures as Bank of Japan’s Governor Kuroda told during his speech today that measures would be taken to stabilize financial markets.
However, gains were capped as caution still reigns supreme given escalation of the total COVID-19 death toll to 3000 victims as per data from global headlines. Bullish cues from Asian markets carried forward into European markets helping major indices and equities rebound. Major European indices climbed nearly 1.5% post last week’s 12% decline, but risk aversion continues to remain steady as evident from positive activity surrounding safe-haven assets in the global market.
Precious Metals: While risk assets are on rebound activity, gold, silver, and other major precious metals are also experiencing rebound activity as risk aversion remains strong in the global market over escalating death toll count. Subdued USD on declining US T.Yields also helped with rebound price action.
On The Lookout: As trading session opens for the week, major indices across key markets see rebound action, but the prospect for change in directional bias remains low to null as caution reigns supreme with escalating COVID-19 related death toll.
On the Brexit front, the EU & UK have begun talks for future relations. Still, hopes for progress are extremely low, given the EU’s dissatisfaction with the UK’s decision and attitude towards compliance with bloc’s rules. In the week ahead, traders await the release of OPEC decision following meeting during Thursday and Friday over decisions on further supply reduction. Thursday will see the race for the US Presidential nomination gain a clear outlook over the exact standing of each contender given the fact that 14 states will cast ballots, which will decide the status of each candidate.
There is also the release of the BOC interest rate decision. The BOC’s forward guidance and policy stance will greatly help gain a clear idea of the willingness from major central banks to make efforts towards stimulating the economy and making rate cut decisions. On the release front, the US calendar today sees the release of ISM manufacturing employment and PMI data and earnings report from NYSE listed Baxter International Inc.
Trading Perspective: As USD remains weak, major global currencies are likely to maintain positive price action for the rest of today’s European and US markets hours, but the possibility for sharp gains and change in directional bias remain non-existent.
While cues from the international market point to the possibility of a rebound in Wall Street later today, the opening is expected to be subdued with major indices and key stocks continuing to decline as evident from US futures trading in the international market today which saw dovish price action. Wall Street could see some level of rebound activity. Still, major indices will remain under bearish pressure unless global economic outlook gains a positive change or headlines hint at the virus outbreak in major global economies reach the peak.
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