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 4:30 AM (GMT) 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.
|
Stock Market |
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 9:00 AM and 9:30 PM (GMT) respectively. The Eurozone retail sales numbers come at 10:00 AM followed by the US ISM non-manufacturing numbers at 3:00 PM. Finally, Fed members Evans and Bostic speak at 3:45 PM and 8:15 PM.