The Japanese GDP YoY Q2 of -28.1% released
earlier came in better than expected of -28.6% however, remained far worse than
the prior of -2.3%. The global lockdown that took place in the second quarter
of this year was the main reason behind this number. This figure did not have
any observable effect of the Japanese price against major currencies.
Equities
Global
stocks steadied on Tuesday following the European stock rebound yesterday as
investors ignored concerns of the market decline that happened on Friday as
some market saw it as taking profit operation at the end of the weekly session.
The
US-China tensions continue to be one of the market’s concerns also but, it is
unlikely to see any major development at least until we know the identity of
the US president for the coming four years.
Investors'
eyes are monitoring the US election race and preparing for either continuing
with the current policy if Trump was elected for a second presidential term or
witnessing a shift in the current US policy if Biden became the new master of
the US White house.
Stock Market |
Change % |
+0.5% | |
+0.8% | |
-0.2% | |
+0.5% | |
+1.3% | |
+1.9% | |
+1.2% |
Currencies
The
US Dollar index closed yesterday in the green for the sixth day in a row and
pointed higher on Tuesday. The US dollar weakened by over 10% since mid-March
to a 28 months low prompting the ECB Chief Economist Philp Lane to highlight
the importance of the currency exchange rate, even if the ECB does not target
it. Economies like the German and the French generate growth from net export
and a strong Euro could significantly reduce these nations' exports. From a
technical point of view, a close above 93.50 changes the technical outlook from
negative to neutral.
The
Euro on the other hand retreated yesterday due to its negative correlation with
the greenback. EUR/USD hence,
a close below 1.1750 changes the positive outlook of the pair to neutral.
The British pound retreated against the US
Dollar due to an increase in the possibility of ending the EU/UK negotiations
with no deal. Both sides are now entering the final stage if the negotiations
and they need to reach an agreement by the European Council meeting by Oct 15
to have enough time to enforce it by the end of the year. A close below 1.3048
could end GBP/USD upward trend and change the technical outlook to neutral.
Commodities
Rising
numbers in COVID1-19 cases in the US weighed on the crude oil price and sparked concerns about
demand for fuel. Brent oil, declined by nearly 0.5% to $41.78 a barrel while US
oil fell by 0.8% to $38,85 per Barrel.
Gold
has continued its sideways move on Tuesday after multiple failures since August
19 to break below $1,921. A close below this support changes the technical
outlook of XAU/USD from neutral to negative and may send it to $1,859.
Looking Ahead
Today
on Economic
calendar, investors will be
looking at the Eurozone GDP final read of the Q2 coming at 1:00 PM (UAE time)
and the US consumer credit change for July at 11:00 PM.