News & Analysis

Overnight on Wall Street: Tuesday 13/08/19

agosto 13, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

The political unrest in Hong-Kong and Argentina’s election outcome has exacerbated the bearish tone in the markets. The Hong Kong airport has cancelled all flights after the protesters stormed the arrival hall. Global stock markets were in a sea of red.

All major US equity indices finished in negative territory:

US sharemarket: Dow Jones Average Industrial -1.5%, S&P 500 -1.2%, and Nasdaq Composite -1.2%.

The month of August is proving to be challenging for investors. Investors are rallying in safe-havens. Treasury yield sank further as demand for bonds keeps rising amid market angst.

Currency Markets

In the FX market, the two main takeaways from the overnight session are the Japanese Yen and the Argentina Peso. The Yen is benefitting from haven flows as risk sentiment soured with the current political tensions in Hong Kong and the results of the elections in Argentina.


Source: Bloomberg Terminal

The Argentina Peso plunged by 15% on Monday after the country’s centre-left opposition leader won an election primary. An Argentine debt default rattled the markets and weakened the Peso.


Source: Bloomberg Terminal

Commodities

Oil producers are trying to come together to halt the sharp slide in oil prices. It was reported that Kuwait’s Oil Minister expresses its commitment to implement accord with oil-exporting countries to reduce oil output to support crude oil prices.

Crude oil recovered slightly from the selling pressure on the back that OPEC and non-OPEC producers are ramping up efforts to cushion the fall. However, the fears of a global economic downturn and its adverse impact on the demand for oil could keep a lid on gains.

As of writing, WTI and Brent Crude are currently trading in the vicinity of $54 and $58.


Source: GO MT4

The gold rally is telling the story of the financial markets. A risk-off sentiment prevails which means that traders are piling up in safe-havens. The XAUUSD pair jumped to a high of $1,517   before settling at $1,512.


Source: Bloomberg Terminal

Cryptocurrencies

With no end in sight to the ongoing US-China trade war and the global run towards easing policies, eyes are on the cryptocurrency markets which usually performed well during geopolitical tensions.

Bitcoin retreated from the $12,000 mark and is currently trading at $11,382.

BTCUSD (Daily Chart)


Source: GO MT4

Key Upcoming Events Ahead

RBA’s Kent Speech
Harmonized Index of Consumer Prices, ZEW Survey – Current Situation and Economic Sentiment (Germany)
Unemployment Rate, Average Earnings and Claimant Count Change (UK)
ZEW Survey – Economic Sentiment (Eurozone)
Consumer Price Index (US)

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