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How Are Trump’s Health Updates Reflected in EUR/USD and Gold Prices?

How Are Trump’s Health Updates Reflected in EUR/USD and Gold Prices?

Equities recover, Coronavirus numbers soar, and eyes on data release, what moves markets today?

The final read Australian services PMI for September of 50.8 came in higher than expected of 50.0 and better than the previous of 49. However, this print did not have any observable effect on the Australian dollar against major currencies. It is worth noting that market eyes will be on the RBA rate decision’s meeting tomorrow at 4:30 AM (GMT) to find out about the Central bank’s updates.


Equities

Asian stock markets stabilized on Monday on easing concerns about Trump’s health. On Friday, the US president tested positive for the coronavirus, causing the US main indices to close in the red due to political uncertainty. However, news that the US president Trump could be discharged from the hospital today improved the risk sentiment slightly. Trump tweeted a video on Sunday to say he was better and thanked the medical staff for the job they have been doing.

The US fiscal stimulus deal is still simmering, progress announced from the US House Speaker Nancy Pelosi on Sunday. Last week, Republicans offered a $1.5 trillion package, while Democrats approved a bill in the house of $2.2 trillion yet the bill is unlikely to pass in the Republican-dominated Senate.

Stock Market

Change %

S&P 500

-0.9%

Dow Jones

-0.4%

NASDQ

-2.9%

Japan 225

-0.5%

DAX 30

-0.03%

FTSE 100

+0.5%

CAC 40

+0.2%


Currencies

The US Dollar index retreated last week to a lower trading zone 91.78- 94.04. The risk-off sentiment caused by Trump sickness helped the index to stay around the high end of the zone. A close above 94.04 could send the Dollar index even higher.

The EUR/USD slowed down its downward move last week and climbed to a higher trading zone 1.1713- 1.1909. The pair could rally further for a test of the high end at 1.1909 while above 1.1713.

The Coronavirus continues to break records with nearly 23.0 thousand cases reported yesterday in the UK (an all-time high) according to GOV.UK. Nonetheless, the Sterling pound remained stable against the US Dollar as the UK Chancellor Richi Sunak warned that a further lockdown would cripple the economy and the society. More relief to the markets came from extending the EU/UK talks by a month in a bid to reach a deal. GBP/USD may rally towards 1.3048 while above 1.2773.

Commodities

The oil price recovered some of last week’s losses on the news of Trump’s improvement and possible check-out from the hospital today. On Friday, the Brent oil hit an over two and a half months low at $38.77. The price may decline towards $37.00 while below $39.60 and the US Crude may test $36.32 while below $38.37.

The Gold lost nearly 0.5% of its value on Monday due to improved market sentiment however, the precious metal remains moving in the same trading zone $1,861- $1,921.

Looking Ahead

Eyes will be on the Eurozone and the UK’s final numbers of the composite PMI for September at 9:00 AM and 9:30 PM (GMT) respectively. The Eurozone retail sales numbers come at 10:00 AM followed by the US ISM non-manufacturing numbers at 3:00 PM. Finally, Fed members Evans and Bostic speak at 3:45 PM and 8:15 PM.


This information/research prepared by Mahmoud Alkudsi does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk. The research provided does not constitute the views of JME Financial Services (Pty)Ltd nor is it an invitation to invest with JME Financial Services (Pty)Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date the report is published, the research analyst and his/her spouse and/or relatives who are financially dependent on the research analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities). The research analyst in not employed by JME Financial Services (Pty)Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation or particular financial needs before making a commitment to invest. The laws of the Republic of South Africa shall govern any claim relating to or arising from the contents of the information/ research provided.