The final read Australian services PMI for September of 50.8
came in higher than expected of 50.0 and better than the previous of 49.
However, this print did not have any observable effect on the Australian dollar
against major currencies. It is worth noting that market eyes will be on the
RBA rate decision’s meeting tomorrow at 7:30 AM (UAE time) to find out about
the Central bank’s updates.
Equities
Asian stock markets stabilized on Monday on easing concerns
about Trump’s health. On Friday, the US president tested positive for the
coronavirus, causing the US main indices to close in the red due to political
uncertainty. However, news that the US president Trump could be discharged from
the hospital today improved the risk sentiment slightly. Trump tweeted a video
on Sunday to say he was better and thanked the medical staff for the job they
have been doing.
The US fiscal stimulus deal is still simmering, progress
announced from the US House Speaker Nancy Pelosi on Sunday. Last week,
Republicans offered a $1.5 trillion package, while Democrats approved a bill in
the house of $2.2 trillion yet the bill is unlikely to pass in the Republican-dominated
Senate.
Change % | |
-0.9% | |
-0.4% | |
-2.9% | |
-0.5% | |
-0.03% | |
+0.5% | |
+0.2% |
Currencies
The US Dollar index retreated last week to a lower trading zone 91.78-
94.04. The risk-off sentiment caused by Trump sickness helped the index to stay
around the high end of the zone. A close above 94.04 could send the
Dollar index even higher.
The EUR/USD slowed
down its downward move last week and climbed to a higher trading zone 1.1713-
1.1909. The pair could rally further for a test of the high end at 1.1909 while
above 1.1713.
The Coronavirus continues to break records with nearly 23.0
thousand cases reported yesterday in the UK (an all-time high) according to
GOV.UK. Nonetheless, the Sterling pound remained stable against the US Dollar
as the UK Chancellor Richi Sunak warned that a further lockdown would cripple
the economy and the society. More relief to the markets came from extending the
EU/UK talks by a month in a bid to reach a deal. GBP/USD may rally
towards 1.3048 while above 1.2773.
Commodities
The oil price recovered some of last week’s losses on the news
of Trump’s improvement and possible check-out from the hospital today. On
Friday, the Brent oil hit
an over two and a half months low at $38.77. The price may decline towards
$37.00 while below $39.60 and the US Crude may
test $36.32 while below $38.37.
The Gold
lost nearly 0.5% of its value on Monday due to improved market sentiment
however, the precious metal remains moving in the same trading zone $1,861-
$1,921.
Looking Ahead
Eyes will be on the Eurozone and the UK’s final numbers of the
composite PMI for September at 12:00 PM and 12:30 PM (UAE time) respectively.
The Eurozone retail sales numbers come at 1:00 PM followed by the US ISM
non-manufacturing numbers at 6:00 PM. Finally, Fed members Evans and Bostic
speak at 6:45 PM and 11:15 PM.