News & Analysis

Overnight on Wall Street: Thursday 03/10/19

October 3, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Risk sentiment in global markets was mostly driven by economic data and the ruling of the WTO in favour of the United States. While the slowdown in the manufacturing sector is a global phenomenon, the softer than expected private jobs figures did little to calm investors’ global growth fears.

The WTO has ruled in favour of the US in the Airbus dispute, which will pave the way for tariffs on $7.5 billion of EU goods. The ruling has captured attention and dented sentiment as trade tensions with the EU escalated to a new level.

Wall Street extended losses and ended the day deep in the red. All major US equities indices dropped by nearly 2% overnight.

Currency Markets

In the FX market, the fragile sentiment drove investors into safe-haven currencies. Major currencies were mostly stronger against the greenback.


Source: Bloomberg Terminal

  • The Japanese Yen emerged as the best G10 currencies against the US dollar. 
  • Commodities currency like the Canadian dollar weakens as oil prices fell overnight.
  • The Antipodeans recovered from recent lows mostly on the back on a weaker US dollar.

The GBPUSD pair is trading relatively flat as the UK Prime Minister delivered its new Brexit proposals to the EU. The new plan will see Northern Ireland stay in the European single market for goods, but leave the customs union. The Irish Prime Minister stated that the new plan does not fully address the agreed objectives, but markets participants also took note that the PM is not fully rejecting the new plan.

The progress is deemed as positive, but traders are looking for more concrete developments or comments from the EU and Ireland. Overall, the positive Brexit-related headlines and the weakness of the US dollar is helping the GBPUSD to regain the 1.23 level.

Commodities

Oil prices are falling on the pressures and fears of a deteriorating global economic backdrop. The EIA report brought little support as it revealed that the US crude supplies rose by 3.1M barrels.

As of writing, the WTI and Brent Crude are trading lower in the vicinity of $52 and $57.

UKOUSD and USOUSD (Hourly Chart)


Source: GO MT4

Investors continue to pile in safe-havens which helped the XAUUSD pair to trade higher. The pair reclaimed the key psychological level of $1,500, but are finding resistance at that level.

XAUUSD (3-Day Chart)


Source: Bloomberg Terminal

Key upcoming events

Foreign Bond and Stocks Investment (Japan)
Exports, Imports, and Trade Balance (Australia)
ECB’s De Guindos Speech, Markit PMI Composite and Retail Sales (Eurozone)
Markit PMI Composite & BoE’s Tenreyro Speech (Germany)
Markit Services PMI (UK)
Fed’s Quarles Speech, Jobless Claims, Markit Composite and Services PMI, ISM Non-Manufacturing PMI, and Factory Orders (US)

Friday, 04 October 2019
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Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

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