News & Analysis

Overnight on Wall Street: Tuesday 08 September 2020

September 8, 2020

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

The US financial markets were closed for Labor Day. The immediate attention was on President Donald Trump who raises the idea of decoupling the US and Chinese economies. Ahead of the US election, markets are expecting the Trump Administration to ramp up the rhetoric to curb the relationship between the US and China. 

After last week’s sell-off, European stocks rallied on Monday:

  • Stoxx50 added 53 points or 1.6% to 3,314
  • FTSE100 rose by 138 points or 2.4% to 5,937.
  • CAC40 added 89 points or 1.8% to 5,054.
  • DAX finished 258 points or 2% higher to 13,100.

Currency Markets

In the FX space, major currencies were generally weaker than the US dollar. It was a relatively subdued data with major pairs trading in familiar ranges. The focus was on the Pound Sterling ahead of the 8th round of negotiations between the European Union and the United Kingdom which is scheduled to take place from Tuesday 8 September to Thursday 10 September 2020 in London.


Source: Bloomberg

For the chart of the day, Adam Taylor CTEe takes a look at the NZDJPY pair.

As we start a fresh new trading week, NZDJPY has made our Chart of The Day on the four-hour time frame. We’ll be examining the pair using the Ichimoku Cloud method.

Despite the bearish tones presented in the shorter-term time frames, including the drop of almost 100 pips since the beginning of September, the Kiwi Yen cross remains subtly bullish as we check out the various indicators shown above.

Firstly, note the lagging span (purple line) sits way above the cloud, and price action currently sits well above the 200 Day moving average line. Both of these highlights the overall bullish sentiment longer-term for the pair.

You can also clearly see how innately price action is respecting the cloud level of 71.11 as support. Should this move continue to appreciate these elements, we may witness a re-test of the 72.00 regions before shifting higher during the upcoming sessions.

On the other hand, if sellers regain some ground in the short-term, then the missed weekly pivot level of 70.50 may become a primary downside target. It’s also coupled with the 200-day moving average line nearby, so theoretically, it should hold as a substantial area of support for NZDJPY.

On the economic front, China’s exports grew by 9.5% in August, while imports shrank by 2.1%, as the country’s overall trade surplus narrowed. 

Commodities

Crude oil prices fell the most in over a month last week over fears on the demand outlook. Larger-than-expected draw in inventories reported by the EIA and API failed to lift crude oil prices as it coincided with the decrease in output production related to Hurricane Laura. Amid a lack of drivers and a public holiday in the US on Monday, crude oil prices remained range-bound. As of writing, WTI Crude oil (Nymex) and Brent Crude (ICE) were trading around $39.21 and $42.01 respectively. 

Gold

It was a pretty dull day for gold traders. The precious metal was confined to tight intraday ranges. As of writing, the XAUUSD pair has consolidated around $1,930.


Source: GO MT4

By Deepta Bolaky
 @DeeptaGOMarkets

Key upcoming events

  • BRC Like-For-Like Retail Sales (UK)
  • Overall Household Spending, Current Account and GDP (Japan)
  • Trade Balance (Germany)
  • Gross Domestic Product (Eurozone)
  • Inflation Report Hearings (UK)
Wednesday, 09 September 2020 
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0.826 5.593 0.186 0.1 0 1.674 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 0 0 1.139 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.

Next:
Previous: