Crude oil cautious ahead of Inventory data

Posted on September 2, 2020September 4, 2020 by Exclusive Capital Research Team

Market Brief, Wednesday, 2nd of September, 2020

The major US indices extended their gains with big-tech companies trading higher spurring a flurry of buying. In the overnight session however, demand waned with the Nasdaq retreating from it’s record high.

Asian equity markets were mixed following the fresh record highs in the US with the ASX up 1.8% led by materials, the Nikkei up 0.3% while in China the Hang Seng and Shanghai composite were down by 0.6% and 0.4% respectively.

In the FX space, the dollar index saw a slight rebound from yesterdays 2-year lows following strong ISM data and is currently trading around 92.37. The EURUSD pair briefly traded above 1.20 before retreating to 1.19 and GBPUSD trading as high as 1.3483 before subsequently retreating to 1.3382.

The energy space both WTI and Brent traded sideways with WTI currently trading around 43.10 and Brent trading around 45.95 ahead of the weekly inventory report later today.

US Dollar Selling, Impact of Fed Powell’s speech hits home

Posted on September 1, 2020September 1, 2020 by Exclusive Capital Research Team

Market Brief, Tuesday, 1st of September, 2020

The Federal Reserve’s decision to shift its inflation focus last week is catching up to the US dollar. Federal Reserve Chair Jerome Powell outlined an accommodative policy change which is believed could result in inflation moving slightly higher and interest rates staying lower for longer.

Focus for the dollar this week will be the outcome of the Purchasing Managers Index, Payrolls data with the penultimate Non-Farm Job report published on Friday. No significant deviation from July’s data is expected except in the quality of NEW jobs created reflected by the average hourly earnings, expected to be down by 0.2%

On Thursday China will look to improve on Monday’s manufacturing and non-manufacturing PMI with the Caixin Manufacturing PMI. Although considered low impact news any better than expected data from the world’s largest economy, that is correlated to inflation and growth would be more than welcome during these times of uncertainty with immediate impact on the ‘Aussie’ and WTI crude oil prices.

The Euro is currently carrying the biggest punch amongst the ‘Majors’, closing 0.24% higher than the dollar. Except for fears of a second wave pandemic, the Euro will look to extend its bullish run on upcoming risk events and poor economic performances from its counterparts.

Yesterday sterling hit another YTD high against the dollar but began cooling off at 1.34. The cable continued to disrespect Brexit concerns and potential negative changes to monetary policy. A reality check could be just around the corner if Brexit disputes continue and BoE Governor Bailey’s speech negatively impacts trader’s sentiment on Thursday.