Daily Market Updates 10.08.2020

Monday 10.08.2020

Asian Session

Asian equities held tight ranges today as concerns over increased tensions between the United States and China weighed on sentiment. The market sentiment remains mildly positive as US President Donald Trump’s recent executive orders pushed the opposition democrats back to the discussion table for phase 4 COVID-19 stimulus package. Hong Kong’s index closed negatively on Friday by 1.6%, while Shanghai index lost 0.96%. South Korea’s Kospi index gained 0.49% and Japan’s index Nikkei lost 0.43%.

US Stocks

US stocks markets had gains and were mixed late Sunday with SP500 rising by 0.3% and Nasdaq futures dipped slightly, after Trump announced an extension to unemployment benefits, even though the order for coronavirus aid was dismissed by Democrats and some Republican lawmakers. The orders would provide an extra US$400 per week in unemployment payments, less than the US$600 per week passed earlier in the crisis. On Friday’s closing Dow Jones gained 0.18%, while SP500 rose slightly by 0.06% and Nasdaq lost 0.87%. Al eyes turn to this week quarterly earnings.

Major Currencies  

Euro/Dollar make efforts to recapture 1.18 price level after suffering a substantial drop on Friday following upbeat US jobs figures and escalating Sino-American tensions. Investors turn their oversight to the fiscal stimulus impasse in Washington after Trump’s executive order. While US jobless claims report last week was better than expected, the unemployment rate remains above 10%. The US economy gained 1.763 million jobs in July, with the unemployment rate falling to 10.2%. Pound is traded below 1.31 against dollar, and attempting to recover from the dollar’s surge. A survey showing that a third of UK employers may lay off workers is weighing on the pound. Pound/Dollar failed to hold onto the highs amid the BoE policy decision and Sino-American tensions. All eyes turn to this week’s UK jobs report, along with UK GDP and US consumer and UK employment is expected to be at the same 3.9% in June. Dollar/Yen  climbed to 106.05, last Friday on release of upbeat U.S. jobs report, even though lack of follow-through buying triggered profit-taking and price retreated to 105.73 in thin Asian trading today as Japanese markets remain closed for Mountain Day holiday as geopolitical tensions between U.S. and China continue to remain.

The yen rose 0.1% to 105.77 per dollar.

Gold Market

Gold prices slid slightly to $2,029.20 per ounce after reaching an all-time high of 2,072.5 last week in spot trading. The correction was derived from upbeat US NFP report of last week and the US-China war escalation. “It’s quite easy to see gold going to $4,000,” Frank Holmes, CEO at investment firm U.S. Global Investors, told CNBC on Monday. As long-term scenario gold may fall around $1600 per ounce by the time of US elections that will take place in less than 100 days, before rallying again next year.

Oil Market

Crude Oil prices were edged higher with Brent crude rising 43 cents to US$44.83 per barrel and US crude Oil added 54 cents to US$41.76 per barrel. State oil giant Saudi Aramco’s Chief Executive Officer (CEO) Amin Nasser said on Sunday, oil demand recovery is picking up pace in Asia as economies gradually open up after the easing of coronavirus lockdowns. Technically the black gold has room to further drop at $32 per barrel if it breaks below $38 per barrel.

European Stocks

European markets were set to open in positive territory, with EUROSTOXX 50 futures up 0.77% and FTSE futures up 0.71%. On Friday, DAX30 rose by 0.66%, as Germany’s trade surplus widening from €7.5bn to €14.5bn at the end of the 2nd quarter. The CAC40 and EuroStoxx600 gained 0.09% and 0.29% respectively.

On the data front 10-08-2020