COVID-19 death toll woes keep equities under pressure. US senate meeting on economic support bill in focus.
Summary: Global equities and major indices have resumed their sharp decline from the previous week post a temporary pause last Friday. The first trading session of the week clearly displays a strong bearish tone as the COVID-19 death toll escalated sharply over the weekend.
In the European market today, major indices are moving range-bound near seven-year lows. Still, the further decline has been capped as headlines hinted at EU area finance ministers meeting via teleconference to discuss about all members backing the release of Euro debt instruments ahead of an official Euro group meeting. Aside from France and Spain, Greece has now joined self European nations announcing nationwide lockdown, while Italy and Germany have been enforcing self-quarantine measures and lockdown for quite a while now.
Precious Metals: Rare metals are trading positive on prevalent safe-haven demand, given a sharp rise in death toll across the globe. A cheaper USD also helped boost demand from emerging markets on account of the lower exchange rate, but the price of yellow metal or silver is yet to rescale monthly highs.
Crude Oil: Crude oil price continued to decline in global market erasing gains made last Friday. As there seems to be no resolution or break to the Saudi-Russia price wars any time soon, demand to supply ratio continues to skew in favor of glut scenario for immediate future pushing price below $25 per barrel.
DXY: The USD index, which measures the strength of the greenback against six major global currencies, was on the defensive during Asian and European hours, albeit holding above 102 level. US government’s failure to push through with a $1 trillion support package acts as a factor weighing down USD.
On The Lookout: Equities continue to remain on the defensive as the COVID-19 death toll continues to rise with each passing day. Aside from EU area finance ministers meeting, traders are also on the lookout for US senate meeting as Phase 3 package worth 1 trillion USD is scheduled to be voted upon yet again today.
On the economic calendar front, the US calendar lacks major updates while the Canadian calendar sees the release of Wholesale sales data. While central banks continue to provide trillions of dollars worth support packages, the moves made so far lack the strength required to cause a major shift in price momentum, suggesting that week ahead is likely to see major indices wallow near monthly lows.
Trading Perspective: Wall Street is set to see major indices and equities open lower over pressure from the US government’s failure in getting the latest economic support bill through in the Senate meeting and highly volatile price action amid thin liquidity conditions.
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