PepsiCo positive earnings and vaccine hopes over FDA status upgrade provides support to risk sentiment.
Summary: Global equities start of the week on a positive note led by hopes for economic recovery. As yet another earnings session comes into focus, and governments across the globe take full efforts to improve the economy via stimulus measures, traders hope to see some light in the form of quarterly earnings results.
In the European market, major indices and key equities opened on positive note supported by early gains in cyclical shares. Later in the day, gains in Automakers, bank, and travel sector shares helped support risk sentiment allowing for risk on market activity across the day.
Rare Metals: Caution led by record covid-19 victim count data from weekend keeps rare metals above key support levels. But risk sentiment in the market today prevented safe-haven metals from seeking any gains, resulting in flat activity on across key safe-haven metals and assets.
Crude Oil: Crude oil price edged lower in the market today, albeit holding within familiar levels as focus shifts to OPEC meeting coming ahead. With agreed production cut extension coming to an end this month and no signs of further extension, demand to supply outlook takes a hit and remains highly shaky, causing the price to trade with dovish bias. But current conditions remain within expected levels keeping price action range bound.
DXY: US Dollar index doesn’t see any major change today with Greenback holding firm at the 96 handle. But pressure continues to grow as new victim count in the US continued to skyrocket during the weekend. Count exceeded peak levels seen during the first wave of the covid-19 outbreak in the US, bringing with it considerable pressure to the local market.
On The Lookout: Vaccine hopes are on the rise while covid-19 continues to impact the global market with the second wave of outbreak. While count at same places reached peak levels seen during the first wave of outbreak, the impact of the same on the global economy is limited as governments are going full swing with recovery efforts and stimulus measures.
News of US FDA upgrading Pfizer and BioNtech firms to fast track status for vaccine candidates also helped ease global concerns to some extent, helping provide a risk on market attitude across all key global market. US macro calendar schedule remains silent for the day aside from speech from Fed members Kaplan and Williams.
Trading Perspective: Given positive earnings results from Pepsi Co ahead of Wall Street opening and vaccine hopes, Wall Street indices are expected to see a sharp upsurge in price action as the market opens for the week. US futures trading in the international market saw positive tone but failed to post huge gains as PepsiCo reports failed to provide expected revision to yearly forecast outlook.
EUR/USD: The pair is trading positive today supported by broad market risk tone with price standing well above the 1.13 handle. Weaker USD also aided the rally, but gains remain capped below the 1.137 handle as traders await updates from US market for clear directional cues.
GBP/USD: The pair is trading flat today but holds firm above 1.26 handle. While USD weakness helps keep price afloat, Brexit concerns weigh down GBP, preventing the pair from seeing major gains. Traders await fresh cues from US market for short term profit opportunities.
USD/CAD: The pair is trading with clear dovish bias in a rally led by broad market USD weakness. The price has declined below 1.36 handle and remains range-bound around the 1.3550 mark. But CAD’s weakness led by dovish crude oil market conditions helped limit the decline. Traders now await US data for short term profit opportunities.
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