Overnight on Wall Street: Wednesday 29/01/2020

Investors got reassured that governments are tightening international travel and border crossings with China and are taking aggressive steps to stop the virus from spreading.

• Dow Jones Average Industrial added 187 points to finish at 28,723.
• S&P500 ended 1% higher at 3,276.
• Nasdaq Composite added 1.4% to close at 9,270.

Global markets rebounded strongly on Tuesday as investors are assessing the ramping efforts of governments to contain the virus and whether to anticipate a temporary delay in the global recovery.

Currency Markets

In the FX market, the rally in the US dollar tamed down as risk sentiment improves. However, the greenback performed relatively well on the back of upbeat Consumer Confidence Index, Home Prices and mixed Durable goods data.

US Dollar Index

The index tracking the performance of the greenback against a basket of currencies- EUR, JPY, GBP, CHF, CAD and SEK edged slightly higher.

US Dollar Index (Daily Chart)

Source: GO MT4

AUDUSD

The Aussie dollar recovered some ground on the increased efforts to control the contagion and is currently trading at 67.60 US cents. Eyes are now on the inflation report scheduled to be released this morning.

AUDUSD (Hourly Chart)

Source: GO MT4

Commodities

The fears of a rapid spread of the coronavirus somewhat had an added layer of uncertainty on the demand outlook. A surprise crude oil draw and speculations of OPEC considering deeper oil cuts or extending production cuts helped oil prices to recover from the 3-months low.

As of writing, WTI and Brent Crude are trading in the vicinity of $53 and $59 respectively.

USOUSD and UKOUSD (Daily Chart)

Source: GO MT4

Gold retreated from recent highs but remains in the elevated levels at around $1,565 despite a strong US dollar and a significant rebound in the stock market.

XAUUSD (Hourly Chart)

Source: GO MT5

Key Upcoming Events

Westpac Leading Index, and Consumer Price Index (Australia)
Gfk Consumer Confidence Survey (Germany)
ZEW Survey – Expectations (Switzerland)
Pending Home Sales, Fed Interest Rate Decision, and FOMC Press Conference (US)
Trade Balance and Exports (New Zealand)

Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.