News & Analysis

Overnight on Wall Street: Tuesday 15/10/19

October 15, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

Trade optimism faded as the absence of concrete details left investors reeling about the progress of Phase 1. The headlines emerging from both sides are positive but market participants are seeing the reluctance from China to embrace the same enthusiasm when President Trump described the agreement made on Friday.

With a public holiday in the US for Columbus Day, trading volumes were also lighter. Wall Street stalled after three straight sessions of gains and ended in negative territory.

  • Dow Jones Average Industrial ended 30 points lower at 26,787.
  • S&P500 dropped by 4 points and finished at 2,966.
  • Nasdaq Composite closed 9 points higher at 8,049.

In anticipation of the meeting in Chile in November when President Trump and President Xi Jinping will meet, investors will probably focus on the earnings season for the third-quarter results.

Currency Markets

In the FX market, the Dollar has strengthened against most of the G10 currencies. Amid relatively quiet economic calendar on Monday, the price action was mostly driven by geopolitical updates.

Safe-havens like the Japanese Yen and Swiss franc were also among the outperformers. The British Pound was the weakest in yesterday’s session dragged by Brexit concerns ahead of the EU summit. Despite the recent hopefulness that positive negotiations are underway with all the Brexit-related parties, the chances of a deal before the EU meeting are fizzling out.

The Queen’s speech has opened a new session of UK Parliament and ticked off 26 new bills which might probably never see the light of the day given the reality of Brexit and political drama in the country.

After reaching a low of 1.2516 on renewed uncertainties, the GBPUSD pair rallied over 100 pips and rose about the 1.26 level. The pair experienced strong upward movement over the past two trading sessions, but traders will likely be cautious before the pair higher.

GBPUSD (Hourly Chart)


Source: GO MT4

Commodities

On the trade front, the uncertainties and caution in the markets have sent oil prices lower. WTI and Brent Crude retreated from Friday’s high and are currently trading in the vicinity of $53 and $59 respectively.

The recent invasion by Turkey in Northern Syria and the surprise withdrawal of the US troops is a critical development for the Middle East region. With many condemning the attack, the tensions in the oil-rich region could create significant hurdles in bringing cooperation and unity within oil-producing countries.

UKOUSD and USOUSD (Hourly Chart)


Source: GO MT4

Gold is finding some buyers but is still trading below the 1,500 level. The fragile sentiment regarding the recent optimism is driving some flows into safe-haven assets as well.

As of writing, the XAUUSD pair is trading higher at $1,492.

XAUUSD (3-Day Chart)


Source: Bloomberg Terminal 

Key upcoming events

RBA Meeting Minutes (Australia)
Consumer and Producer Price Index (China)
Industrial Production (Japan)
Claimant Count Change, Unemployment Rate and Average Earnings (UK)
ZEW Survey – Economic Sentiment  & Current Situation (Germany)
ZEW Survey – Economic Sentiment (Germany)
Fed’s Bullard Speech (US)
BoE’s Vlieghe Speech (UK)
GDT Price Index (New Zealand)

Wednesday, 16 October 2019
Indicative Index Dividends
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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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