News & Analysis

Overnight on Wall Street: Wednesday 02/10/19

October 2, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Fears of a global downturn gripped the markets again as the ISM Manufacturing PMI for September dropped to 47.8- the lowest level in a decade. The deterioration in the factory activity reiterates the impact of the trade war across the globe.

Global equities ended in a sea of red. Major US equity indices ended in negative territory with losses above 1%.


Source: Bloomberg Terminal

Currency Markets

In the FX market, major currencies were mixed against the US dollar. Traders turned risk-averse and money flowed in safe-have currencies like the Swiss franc and Japanese Yen.


Source: Bloomberg Terminal

The Australian dollar emerged as the worst-performing G10 currencies against the greenback following the dovish rate cut which saw interest rates in Australia being set to a historic new low at 0.75%. The Reserve Bank of Australia made its third rate cut since June as widely expected. However, the RBA expressed concerns about jobs growth and stated that it was reasonable to expect an extended period of low rates.

A dovish RBA sent the AUDUSD pair to a low of 66.73 US cents. The weakness in the US dollar helped the local currency to regain the 0.67 level.

Commodities

Global growth concerns revived concerns on the demand outlook which initially weighed on oil prices. However, the API report showed that the US stockpiles fell by 5.92 million which cushioned the fall in oil prices.

The oil market went through a tough phase in the third quarter as fears of a global economic slowdown and an unprecedented attack on Saudi Arabian energy facilities challenged fundamentals.

The demand-supply concerns are weighing on energy prices. Economic data revived concerns on the demand side while easing tensions in the Middle East tampered fears of supply disruptions.

As of writing, the WTI and Brent Crude dropped below key levels of $55 and $60 respectively but is consolidating around $54 and $59 ahead of the weekly oil reports.

UKOUSD and USOUSD (Hourly Chart)


Source: GO MT4

A weaker dollar and growth fears helped the yellow metal to find buyers. Investors piled in safe-havens which helped the XAUUSD pair to recouped losses made earlier this week. As of writing, the pair is trading in the vicinity of $1,480.

XAUUSD (3-Day Chart)


Source: Bloomberg Terminal

Key upcoming events

BRC Shop Price Index and Markit Construction Index (UK)
Monetary Base and Consumer Confidence Index (Japan)
Consumer Price Index (Switzerland)
Markit Construction PMI (UK)
Markit Manufacturing PMI (Germany)
MBA Mortgage Applications, ADP Employment Change, ISM-NY Business Conditions Index and Fed’s Williams Speech (US)

 
Thursday, 03 October 2019
Indicative Index Dividends
Dividends are in Points
ASX200WS30US500US2000NDX100CAC40STOXX50
0.17211.3940.7170.0621.63900
ESP35ITA40FTSE100DAX30HK50JP225INDIA50
007.8470000

 

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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