English (India)
24
Sep

German IFO Survey, US Jobless Claims, Costco Earnings

calendar 24/09/2020 - 10:00 UTC

As the US dollar continued to strengthen against most other currencies in the world not only emerging market currencies were under pressure. The AUD/USD pair was down by more than 1.5 per cent on Wednesday alone and by Thursday morning the performance since the beginning of the week was already -3.7 per cent. In emerging markets, the sentiment was also mixed with some pairs under being under pressure more than others. For example, the USD/MXN pair jumped 3.4 per cent higher just over the course of the trading day on Wednesday. Meanwhile the EUR/TRY rate started slowly creeping above the 9.0 threshold, which has been sort of a resistance level over the past days as the USD/TRY pair continued to move to new record heights.As the markets were on the move, precious metals including gold, silver and platinum further declined, practically erasing by now all gains of the past two months.While most equity index futures closed overall lower on Wednesday, the trends were mixed within different regions. In the US major market indices closed with sizable losses, touching on the low from Monday. On the other hand, multiple European and Japanese indices traded almost unchanged.On Thursday EU data on new commercial car registrations in July and June will be released. The French Business Climate Indicator and the German Ifo-index will also be published. Also on Thursday EU industry and common market ministers are set to meet in Brussels.

EUR/USD

As the dollar strength continues to dominate the currency markets, the EUR/USD pair further retraced towards a new two months low. The euro itself performed overall relatively stable against other major currencies, with the EUR/AUD pair continuing to rapidly improve amidst the weakness of the Australian dollar, while the EUR/JPY pair touched again on the low from Monday just above 122.5.European and German PMI numbers both surprised with a strong performance in the manufacturing sector survey, which was for the EU at 53.7 better than expected, while services cratered to just 47.6, indicating an overall pessimistic sentiment for the service sector.On Thursday the French Business Climate Indicator and the German IFO survey results will be presented.

EUR/USD

Gold

Gold, silver and other precious metals were yet again under considerable pressure, with a troy ounce of gold trade by Thursday morning at just around $1,850, which marks the lowest price in two months.Besides the strengthening dollar, some analysts point at the lower central bank purchases and ETF inflows as reasons affecting the demand for the precious metal. It remains doubtful, whether interest rate considerations play a significant part in the current price formation as for example the 10 year US Treasury Note benchmark remained in the past days relatively stable, trading mostly in a range of around 0.65% to 0.70% annualized yield.In terms of US fundamental data for Thursday weekly jobless claims numbers and the Federal Reserve Bank statistics as well as new home sales figures for August can be expected.

Gold

WTI Oil

Oil prices closed yet again in the red on Wednesday, despite data from the Energy Information Administration (EIA) indicating a further draw of 1.6 million barrels crude oil from stockpiles over the past reporting week as well as gasoline inventories that were down by 4 million barrels.The continued concerns about the coronavirus pandemic and the slow recovery of the airline industry could be one factor affecting global demand.On Friday the US Baker Hughes Oil Rig Count will be published. Over the past three months the number of oil rigs in operation has steadily remained in a tight range of around 180 – this is merely a quarter of the operational capacity that supplied the market just a year ago.

WTI Oil

US 500

Key US stock indices like the US 500 again settled in the red, testing the low from Monday. Analysts indicated that market participants were said to be concerned not only by the rising numbers of new coronavirus infections but also by the uncertainty over the outcome of the US Presidential elections.Tesla (-10.39%) shares continued to head lower after investors might have been disappointed by the lack of directly available innovations from the much-hyped ‘Battery Day’ on Tuesday. For the market indices possibly more painful was the steep drop in the share value of Apple (-4.45%) and other high market cap companies like Microsoft (-3.47%) and Microsoft (-4.19%).Services sector PMI data from the US indicated a small decline in confidence from 55.0 down to 54.6, while the manufacturing PMI improved further to 53.5. House price index data indicated that house prices continued to rise in July with prices up by 6.5 per cent annually.Again, some few companies are due to release their quarterly results on Thursday. Among others this will be Accenture and Costco.

US 500

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