By Deepta Bolaky
@DeeptaGOMarkets
The week kickstarted with the concerns over the health of the US President to progress with conflicting signs on stimulus negotiations. It was another volatile week as markets sentiment flip flop back and forth between risk-on and risk-off.
After inconsistent headlines over the weekend, risk appetite improved on Monday on the back of President Trump’s health, higher expectations of a coronavirus package from the US and positive Brexit headlines. However, the momentum was short-lived as the US President Trump returned to the White House was marred by his tweet abruptly ending the stimulus talks.
As the week progresses, investors noted that the President is backtracking on his decision and there were hopes for different targeted stimulus packages or aid for the US economy.
Global equities were better bid towards the end of the week on the resurgence of optimism.
Source: Bloomberg
Forex Market
In the forex market, the major currencies were mixed against the US dollar which lost some of its haven gains following the renewed optimism seen across the week. Commodity-currencies strengthened against the greenback.
Source: Bloomberg
The Aussie dollar pared the losses made on Tuesday following the RBA monetary policy meeting and the Budget. On the economic front, aside from the dismal trade balance figure, the Aussie dollar is finding some support on housing data and the financial stability review:
The Australian Financial Stability Review states that “Australian businesses and households are generally in a strong financial position but some will struggle in the near term”. At a glance, the report shows that:
As of writing, the AUDUSD pair has erased losses seen at the beginning of the week to trade around the 0.7180 level.
Source: GO MT4
The Antipodean currency was among the worst-performing G10 currencies against the US dollar, dragged by dovish comments from the RBNZ’s official that the central bank is actively looking into negative OCR. On the economic front, the Business Confidence and Activity Outlook came above expectations:
After dropping to a low around the 0.65 level, the NZDUSD pair was firmer on Friday above the 0.66 level.
Source: GO MT4
The improvement in risk sentiment and Hurricane Delta brought some relief in the energy market despite much uncertainty on the demand outlook and bearish oil reports.
As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading around $41.12 and $43.27 respectively. Traders to monitor the hurricane Delta which is expected to hit the energy-producing region of the Northern Gulf Coast in the coming days.
The precious metal caught a breather on a weaker US dollar and hopes of a new US stimulus package. After dropping to a low of $1,872, the XAUUSD was seen trading firmer above the $1,900 level towards the end of the week.
Source: GO MT4
By Deepta Bolaky
@DeeptaGOMarkets
Monday, 12 October 2020 Indicative Index Dividends Dividends are in Points |
||||||
ASX200 | WS30 | US500 | US2000 | NDX100 | CAC40 | STOXX50 |
o | 0 | o | o | 0 | 0 | 0 |
ESP35 | ITA40 | FTSE100 | DAX30 | HK50 | JP225 | INDIA50 |
0 | 0 | 0 | 0 | 0 | 0 | 0 |
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