Global equity market
(Source: KVB PRIME)
The US equity market opened in a weak fashion but improved throughout the middle of the day yesterday,with the banking and technology sectors leading the way. After climbing back 1%, the market’s rate of appreciation slowed somewhat.
The Dow Jones closed up by 0.2%at 26815.44,the NASDAQ rose 0.58% to 10896.47 and the S&P 500 saw a 0.3% increase to 3246.59. Notably, vaccine-related equity is still falling.
Europe’s market suffered fluctuations; the DAX decreased 0.29% to 12606.57, while the FTSE lost its gains from the previous day,dropping1.3% to 5822.78.
Meanwhile, the Chinese market opened low and went lower. The Shanghai Stock index went down by 1.72%, the SZSE Component index fell 2.24% and the GEM index went down 2.46%.
The semiconductor,cloud, gaming and military sectors led the fall. Conversely, agriculture and secondary new equity performed strongly against an otherwise pessimistic market.
Crude oil forward contracts
WTI oil fell to a $39.11 daily low and rebounded to $40, hitting daily highs of $40.34 before closing up by 1.40% at $40.14 per barrel.
Brent oil rose 0.58% to hit $41.73 per barrel.
Precious metal forward contracts
Gold went down further below$1850, fluctuating to daily lows of $1848.78. The price climbed back to $1867.31 at closing after hitting a daily high at $1876.91 by the end of the North American session.
Silver dropped 5% but rebounded by 1.61% to close at $ 23.12 per ounce.
Currencypairs
· USDX down to93.95 (-0.428%)
· EUR/USD up to1.16685 (0.063%)
· GBP/USD up to1.27462 (0.178%)
· AUD/USD down to 0.70466 (-0.385%)
· NZD/USD down to0.6545 (-0.090%)
· USD/CAD down to1.33527 (-0.194%)
· USD/JPY up to105.392 (0.055%)
Global fundamentals
Incumbent US President Donald Trump on Wednesday again declined to commit to a peaceful transfer of power if he loses the upcoming presidential election on 3rd November, citing concerns over potential mail-in voter fraud.
US jobless claims rose by 0.87 million higher than expected last week,marking an increase over the previous week’s figure.
Additionally, sales of new homes in the US rose 4.8% in August to an annualised rate of1.01 million units better than initial predictions.
Europe
Bank of England (BoE) Governor Andrew Bailey is satisfied by the UK’s current quick reaction to the ongoing coronavirus situation and pledged that the BoE will maintain low interest rates for a relatively long time to come, noting the bank is ready to apply further monetary tools if necessary.
UK Chancellor Rishi Sunak announces a new job support scheme to replace the furlough arrangement from November, which will reportedly last another six months.
Sunak said the new scheme would allow businesses to keep employees in a job working shorter hours; the arrangement will cover two-thirds of the pay a worker loses through their reduced working hours.
Employers will continue to pay the wages of staff for the hours they work under the new plan - but for the hours not worked, the government and the employer will each pay one third of their equivalent salary.
Major assets intraday analysis
EUR/USD and GBP/USD
The dollar started to draw back and reconsolidated yesterday due to worsening labour market fundamentals from the US; the USDX is presenting a top pattern at the moment.
Accordingly, both the EUR and GBP could reconsolidate upwards – due to pessimistic expectations for tonight’s durable product orders data, these majors look set to test the upwards resistance price, with the euro’s looking to be around 1.170.
However, since the GBP remains suppressed by Brexit uncertainty and tightening coronavirus restrictions, the pound is unlikely to fare quite as well as the euro intraday.
[EUR/USD, four-hour chart] (Source: KVB PRIME)
[GBP/USD, four-hour chart] (Source: KVB PRIME)
AUD/USD
The Australian dollar is performing relatively weaker than other currencies; the AUD/USD pair is going down, not only due to the strong USD, but also due to a weak AUD.
The support level of 0.706 has now become a resistance, and the next resistance is around 0.71.This downward trend looks set to continue for at least the medium term.
[AUD/USD, four-hour chart] (Source: KVB PRIME)
Gold
Gold’s situation is different from most major currencies, but similar to the AUD. Small and medium size investments are continuing to run away and the price met a 23.6% retracement resistance yesterday.
Gold is unlikely to break$1850 today, though the price could potentially test the $1890 resistance.
[XAU/USD, four-hour chart] (Source: KVB PRIME)
USD Index
The USDX needed to restore some balance to the market yesterday due to the oversold nature of both the EUR and GBP. The USDX has now stopped increasing and our resistance prediction around 94.8 remains valid.
As for an intraday assessment, the price consolidation has not yet met its first support at 94.13; a second resistance point for today could be 94.
[USDX, four-hour chart] (Source: KVB PRIME)
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