Exuberance rally over for now

7 October, 2020

US stocks have kicked off Tuesday in a mixed fashion as markets have welcomed the improvement in President Trump’s health, but this in truth may now just be a short-term market blip with the longer-term pandemic and election issues still ever-present.

Negotiations about further fiscal stimulus measures are set to continue, though investors are increasingly nervous whether a package can be approved before election day. That said, we should remember that regardless of who wins this historic and unique vote, monetary policy is going to remain easy and fiscal is going to remain supportive.

The Dollar is now little changed on the day reflecting a small fade in risk assets. It seems the Presidential election mood has slightly shifted this week towards a clear Biden victory with some recent polls showing the Democratic challenger extending his lead to 14 points nationally. A clean sweep victory without having to win any toss-up states would unfreeze Congress and potentially see big spending plans. As the chances of a contested election fade, bond yields are rising with the US 30-year Treasury surging higher and above its 200-day Moving Average for the first time since March 2019.

Further RBA easing to come

The RBA left policy settings unchanged earlier today as expected but changed its statement ever so slightly to hint at further easing, potentially as soon as its next meeting in November. The bank expressed strong concerns about high unemployment and will continue to consider how further monetary policy easing could support the labour market as the economy opens up.

The Aussie is the worst performing major today with AUD/USD struggling to break above the 55-day MA. The pair traded in its narrowest range for some seven days yesterday which can mean we are on the verge of a breakout in the next few sessions. A solid close above 0.7210 should see more upside while a move below Friday’s low at 0.7130 is needed to push the pair south.

Technical outlook: Gold tumbles to 4-month low24 Nov, 2020  

After being trapped within a wide range for many weeks, Gold has finally broken below the stubborn $1850 support level. The primary culprits behind Gold's sharp

Calmer seas on Friday the 13th?13 Nov, 2020  

Asian stocks are mostly tracking Thursday's declines on Wall Street, with most US and European equity futures edging lower at the time of writing...

Market rally to pause on election fatigue?6 Nov, 2020  

It has been a momentous week defined by anticipation, tension and drama around the US presidential election. The outcome of this historic election remains on...

US Elections: Bye Bye "Blue Wave"?4 Nov, 2020  

It's still too early to make a decisive call, but markets appear to be paring back hopes for the so-called "blue wave". Expectations for a landslide win for Democrats...

Respect is Within Reach!22 Oct, 2020  

The Pound is the clear winner today after the EU's chief negotiator Barnier said in a speech to the European Parliament this morning that an agreement with the UK...

Technical Outlook: What is Gold waiting for?20 Oct, 2020  

Our commodity spotlight this week shines on Gold which seems to be waiting for a fresh directional catalyst. Since mid-August, it has felt like the same old story for...

Is the best of the recovery behind us?16 Oct, 2020  

Signs that the spread of coronavirus is gathering pace and dwindling US stimulus hopes have dented sentiment today, with major US stock markets opening...

Another Nasdaq pullback in the works?14 Oct, 2020  

Despite Tuesday's dip of just 0.04 percent, the Nasdaq 100's 14-day relative strength index (RSI) is edging closer towards overbought territory once more...

OPEC Outlook: Time to get real?8 Oct, 2020  

Oil prices remain relatively stable, as investors await OPEC's World Oil Outlook due later today. It comes at a time when demand-side concerns continue to weigh...