Daily Market Updates 15.07.2020
Wednesday 15.07.2020
Asian Session
Despite yesterday gains on Chinese equities, the index is traded narrowly after the Donald Trump announced on Tuesday that he signed a legislation to impose sanctions on China in respect with Hong Kong’s autonomy new law. Meanwhile, the Bank of Japan said in its outlook report on Wednesday that the country’s economy is “likely to improve gradually” from the second quarter. The stocks are traded mixed today with Shanghai index loosing 1.39%, while Hong Kong index lost 0.55%. Japan’s index Nikkei was up by 1.31% and South Korea’s Kospi index gained 0.55%. Australia’s index advanced higher by 1.46%.
| Asian Stock | Closed |
| Nikkei | -0.87% |
| Hong Kong HSI | -1.14% |
| China Shanghai SSE | -0.83% |
| KOSPI – South Korea | -0.18% |
US Stocks
US stock market closed near highs yesterday, as the governor of Fed called for sustained large-scale asset purchases by US Central Banks to aid the economy to recover. Additionally, stocks rose after positive news came out showing a potential virus vaccine and encouraged the market. Dow Jones closed yesterday by 2.1% higher, SP500 gained 1.3% and Nasdaq index gained 0.9%. SP500 on futures index rose by 1%, while Nasdaq future jumped by 0.7%. Investors also remained focus on corporate earnings which showed that JPMorgan Wells Fargo and Citigroup earning fell sharply.
| US Stocks | Closed |
| DOW | +2.1% |
| S&P500 | +1.3% |
| NASDAQ | +0.9% |
Major Currencies & Dollar
The US Consumer Price Index rose by 0.1 higher than it was expected (0.5%) yesterday, however euro remained stronger that dollar and closed the day near previous highs at 1.139.US food and energy prices was up also by 0.2%. The pair is traded slightly above 1.14 and the focus remains on ECB on tomorrow interest rate decision. The pair was supported amid hopes that European Union leaders may agree on stimulus and deepening fiscal integration to shield the economy from the pandemic. The Euro/Dollar is expected to build a shallow pullback and continue towards the target zone at 1.1450. The Japanese yen is currently traded at 107.29 per dollar after reaching levels in 107.4 price level during yesterday against dollar. The Bank of Japan will announce today in its monetary policy meeting its interest rate decision which is expected to remain to minus 0.1% and 10-year government bonds near zero. BOJ said that the Japanese economy is in an extremely severe situation and could contract by 4.7% in the financial year 2020. Additionally, BoJ expects the core CPI to decline to -0.5% within 2020. These dismal forecasts may weigh over the Japanese yen during the day ahead. Pound/Dollar is currently traded slightly below 1.26 and has the potential to go even higher, after the UK Consumer Price Index (CPI) was better than expected and created upbeat inflation figures. The pound is benefiting from British fiscal stimulus and the safe-haven dollar is down on coronavirus vaccine hopes.
Gold Market
Despite that gold is gaining value as long as dollar weakens, the bullishness among gold market timers has rarely been higher that what it is today. The gold bulls need to be patient in their expectation that gold will soar in the upcoming weeks to a new all-time high which is close to $1,900 record high per ounce. Gold prices moved higher and continue to trade near an 8-year high. Gold is currently traded at $1807 per ounce with next major resistance level at $1921 and support level at $1790 and $1740. Total open interest in the managed money category shows that hedge funds are long 221K contracts while short 39K contracts
Oil Market
Oil prices edged higher in the afternoon of Asian trading hours, with international benchmark Brent crude futures up 0.44% to $43.09 per barrel WTI also gained 0.45% to $40.47 per barrel. The American Petroleum Institute yesterday reported much less oil inventories than it was expected and caused the increase in oil demand and investors waiting for the OPEC meeting and its allies later today. The expectations considered a decline of 2.1 million barrels and API showed a decline of 8.3 million barrels. Investors also expecting the EIA report for the weekly US oil inventories. Key members of OPEC and allies including Russia, a group known as OPEC+, are set to decide whether to extend output cuts of 9.7 million barrels per day (bpd) that end in July or ease them to 7.7 million bpd.
European Stocks
European equities were expected to open higher on Wednesday as they did, as investor hopes for a coronavirus vaccine rise. London’s FTSE is seen opening 54 points higher at 6,223, and Germany’s DAX is seen 171 points higher at 12,834. Stoxx600 index is up 0.9% for the day.
On the data front 15-07-2020
| Time (GMT+3) | Event | Impact |
| 06:00 am 15.07 | JPY BoJ Interest Rate Decision | High |
| 09:00 am 15.07 | GBP Consumer Price Index (YoY)(Jun) | High |
| 09:00 am 15.07 | GBP Retail Price Index (MoM)(Jun) | Medium |
| 09:00 am 15.07 | JPY BoJ Press Conference | High |
| 17:00 pm 15.07 | CAD BoC Interest Rate Decision (Jul 15) | High |
| 18:00 pm 15.07 | CAD Bank of Canada Monetary Policy Report (Jul) | High |
