Positive bank sector earnings results and Vaccine cues led risk sentiment to drive market momentum in Wall Street today.
Summary: The equity market today saw mixed activity in Asian market led by US-China tensions which affected risk sentiment. But the European market saw clear positive price action across key indices and equities since the start of today’s trading session despite mixed earnings report updates. News of US Moderna Inc’s experimental covid-19 vaccine showing positive progress helped improve risk sentiment in the market completely.
While Beijing’s response to the US earlier this week caused tensions to spike yet again, lack of further progress on said even allowed the impact of Moderna Inc’s vaccine-related update to offset caution in the market. Alongside hopes for vaccine progress, the expectation among traders for EU summit to approve 750 Billion Euro economic bailout package to aid covid-19 impacted economy keeps recovery hopes high in European market region allowing for bullish market activity.
Rare Metals: Rare metals continue to hold steady slightly below weekly highs. While vaccine hopes aided risk sentiment recovery, and profit booking activity also ate away at some of the previous session gains, both Gold and Silver still stay above key levels -$1800 mark and $19 mark. This happens as lingering caution in the global market provides enough safe-haven demand to offset the impact of recovering risk appetite.
Crude Oil: Crude Oil market is seeing the price of both WTI and Brent indices and their futures in the international market see positive price action today. As API US weekly stockpile data showed a sharp drop in inventory ahead of upcoming OPEC meeting, hopes of traders in the market for physical market rebalancing demand to supply outlook allowed oil price to post more than 1% gains in market today.
DXY: The US Dollar continues to weaken in the global market as the month progresses. While geopolitical woes and covid-19 woes continue to pressure risk sentiment in the market and provide plenty of backing for USD, pressure stemming from the US continues to hammer Greenback, causing it to edge lower. The index is currently moving in the upper half of the 95 mark against a basket of 6 major global currencies.
On The Lookout: As the trading session moves towards the North American market region, focus shifts to yet another day of bank sector earnings report updates. Wall Street today will see quarterly earnings from Goldman Sachs, PNC Financial, US Bancorp and Bank of New York Mellon. Goldman Sachs posted reports earlier in the day with data showing better than expected results over gains led by bond trading and investment banking activities. PNC is also expected to post positive results owing to its recent sale of a stake in Blackrock Inc.
Aside from the banking sector, the US market also sees the release of quarterly data from United Health, ASML ADR and Omnicom. Later in the day, the focus will move towards OPEC staff meeting during which an exact timeline for restoring supply activity in the market post end of supply cut agreement this month is expected to be published. The meeting will also see the committee post a recommendation to Iraq, Nigeria and Angola on reducing their output for next two months as they have been deemed guilty of overproducing oil in last three months despite OPEC+ agreement for production and supply cut efforts.
On the release front, Canadian calendar sees BOC monthly interest rate decision announcement and Manufacturing Sales data. In contrast, the US calendar sees the release of Import & Export price index, Industrial Production, Manufacturing Production and weekly EIA Crude oil inventory data. Later in the day, the focus will shift to release of Chinese GDP, Unemployment rate and Industrial Production data during Pacific-Asian market hours.
Trading Perspective: US futures trading in the international market saw positive price action led by vaccine hopes. Wall Street is set to open on a positive note with major indices and key equities posting solid gains in the early session led by banking sector gains. Vaccine cues helped offset risk-averse mood in the market, and the earnings report will provide directional