Financial market daily

Last trading session review

On Tuesday, U.S. stocks rose, the Japanese yen and Swiss franc came under pressure, the U.S. dollar held firm at high levels and spot gold retreated sharply, falling more than $20 to around $1,548 as China took steps to reduce the impact of the outbreak and risk appetite continued to rise.

On Wednesday, focus on U.S. ADP employment, trade account, ISM non-manufacturing PMI, China’s caixin services PMI in January, the final senate vote on the President’s impeachment and fed governor Lael Brainard’s speech.

Fx: eur/usd close at 1.1042; GBP/usd closed at 1.3031; Australian dollar/us dollar 0.6736; Usd/jpy 109.51; Usd/cad closed at 1.3276; Dollar/Swiss franc closed at 0.9690.

Commodities: spot gold at $1552.48 / oz; Comex gold closed at $1,555.50 an ounce; Spot silver at $17.57 an ounce; Comex futures closed at $17.561 an ounce; Brent closed at $53.96 / BBL; NYMEX crude closed at $49.61 a barrel.

In the currency market

The previous session in New York was trading at $1.1045, with the euro/dollar trading sideways, before trading around $1.1042. From a technical point of view, MACD green kinetic energy column has slightly contracted, KDJ index dead crosses down above the Central Line, indicating that the exchange rate short-term momentum is slightly insufficient. The initial resistance to the upward movement of the exchange rate is 1.1062, the further resistance is 1.1079, and the key resistance is 1.1094. The initial support for the decline of the exchange rate is located at 1.1030, further support is located at 1.1015, and more critical support is located at 1.0998.

GBP/USD: this session opened at 1.3019, recovered slightly during the session, and traded around 1.3028. From a technical point of view, the MACD green momentum column began to show, KDJ index pointing below the Central Line, indicating that the recent downward pressure on the exchange rate is still increasing. The initial resistance on the upward side of the exchange rate is 1.3071, the further resistance is 1.3111, and the more critical resistance is 1.3175. The initial support for the decline of the exchange rate is located at 1.2966, further support is located at 1.2901, and more critical support is located at 1.2861.

Usd/JPY: the session opened at 109.15 and moved steadily higher during the session before trading around 109.48. Technically, the MACD red kinetic energy column is moderately stretched, and the KDJ index continues to move up above the midline, indicating that the current rally may continue. The initial resistance to the upward movement of the exchange rate is 109.87, the further resistance is 110.21, and the more critical resistance is 110.87. The initial support for the decline of the exchange rate is located at 108.86, further support is located at 108.21, and more critical support is located at 107.86.

The stock market

Us and European stocks: us stocks rebounded on Tuesday after solid gains in the previous session as markets recovered from a sharp sell-off triggered by fears of a coronavirus. The dow closed up 407.82 points, or 1.4%, at 28,807.63. The s&p 500 closed up 1.5 percent at 3,297.59. The NASDAQ composite index closed 2.1 percent higher at 9467.97, a record high. The tech-heavy benchmark became the first major index to completely shrug off coronavirus-related concerns.

European stocks closed higher on Tuesday as sentiment improved as investors brushed aside economic concerns over the coronavirus outbreak. The pan-European Stoxx 600 indexes closed up 1.6 percent, led by a 3.6 percent gain in basic resources. Germany’s DAX closed up 240.59 points, or 1.84%, at 13,285.78. The FTSE 100 closed up 114.07 points, or 1.56%, at 7440.38. France’s CAC-40 index closed up 102.54 points, or 1.76%, at 5,935.05.

The bond market

Treasury yields jumped on Tuesday as investors returned to risky assets. The yield on the benchmark 10-year Treasury note jumped six basis points to about 1.5829 percent, while the 30-year yield rose to about 2.0607 percent.

Commodity markets

International spot gold opened at $1,576.06 an ounce in early Asian trading on Tuesday, before falling in volatile trading. Spot gold fell to a low of $1, 564.99 an ounce in early trading before recovering slightly. However, it didn’t last long and the bears soon returned and gold accelerated from just above $1,570 to break through the $1,570, $1,560 and $1,550 levels in quick succession before trading as low as $1,558.79 before recovering slightly from lows to close at $1,552.48.

COMEX gold for April delivery ended down $26.9, or 1.7 percent, at $1,555.50 an ounce.

U.S. WTI crude for March delivery closed down 50 cents, or 1 percent, at $49.61 a barrel on Tuesday, back below the $50 mark for the first time in more than a year. Brent April closed down 49 cents, or 0.9 percent, at $53.96 a barrel on Tuesday. While major oil producers are talking about extending output cuts to stabilize the market, concerns about the outlook for crude demand continue to prevail, with both oil producers officially entering a bear market yesterday, down more than 20 percent from previous highs. U.S. WTI crude hit an intraday low of $49.31 a barrel, while Brent hit an intraday low of $53.69.

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