News & Analysis

Overnight on Wall Street: Thursday 08 October 2020

October 8, 2020

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Risk sentiment remains fragile on Wednesday as US politics weighed on global equities. European stocks struggled for direction and were mostly in the red.


Source: Bloomberg

Wall Street reversed the trend and closed in positive territory. Volatility in Treasuries jumps to the highest since March as investors are concerned about the spread of the virus and the lack of fiscal support for the US economy.

Major US equity indices closed between above 1.5% higher on the possibility of a selected stimulus program may be on the table:

  • The Dow Jones Industrial Average added 531 points or 1.9% to 28,303.
  • S&P 500 rose by 59 points or 1.7% to 3,419.
  • Nasdaq Composite added 210 points or 1.9% to 11,365.

Currency Markets 

In the FX space, safe-haven currencies took a backseat as risk sentiment improves on Wall Street. Investors are now digesting the possibility of targeted and different forms of stimulus rather than a huge fiscal stimulus program.  Major currencies were mixed against the US dollar.


Source: Bloomberg

Amid a relatively muted economic calendar, the price action in the currency markets revolved mostly around geopolitics. The FOMC minutes released in the US session failed to move markets: 

“Participants observed that the incoming data indicated that economic activity was recovering faster than expected from its depressed second-quarter level, when much of the economy was shut down to stem the spread of the virus.”

Commodities

The improvement in risk sentiment brought some relief in the energy market but crude oil prices remain underpinned by much uncertainty on the demand outlook and bearish oil reports. After the API weekly reported a build in crude oil inventories of 951,000 barrels for the week ending October 2, the EIA Crude Oil Stocks Change came in at 0.501M, above expectations (0.294M) in the same week. 

As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading around $40.08 and $41.99 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.

Gold

The precious metal was a tad bit firmer overnight on the hopes of some sort of stimulus and a weaker US dollar. As of writing, the XAUUSD pair is currently trading at around $1,885.


Source: GO MT4

By Deepta Bolaky
 @DeeptaGOMarkets

Key upcoming events

  • Current Account (Japan)
  • Unemployment Rate and SNB’s Chairman Jordan speech (Switzerland)
  • Trade Balance (Germany)
  • ECB’s Mersch Speech and Monetary Policy Meeting Accounts (Eurozone)
  • Jobless Claims (US)
  • BoC’s Governor Macklem Speech (Canada)
Friday, 09 October 2020 
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0.445 0 0.067 0.026 0 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 0 0 0 0 0


Disclaimer:  The articles are from GO Markets analysts,  based on their independent analysis or personal experiences. Views or opinions or trading styles expressed are of their own;  should not be taken as either representative of or shared by GO Markets.  Advice (if any),  are of a ‘general’ nature and not based on your personal objectives, financial situation or needs.  You should therefore consider how appropriate the advice (if any) is to your objectives, financial situation and needs, before acting on the advice.  If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.

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