News & Analysis

Overnight on Wall Street: Tuesday 11/06/19

Juni 11, 2019

By Deepta Bolaky
 @DeeptaGOMarkets

Equity Markets

A positive start to the week with encouraging geopolitical developments. Investors were hopeful after Mexico talked President Trump out of tariff threat and on reports that there might be a meeting with President Xi at the G20 summit this month.

  • The Dow Jones Industrial Average and S&P500 rose by 0.30% and 0.47% respectively.
  • The Nasdaq Composite finished higher by 1.05%.

As of writing, we note that President Trump told reporters at the White House that he will raise tariffs on China if President Xi does not meet him at the G20.

China is not temporary off the hook like Mexico which will force investors to remain cautiously bid as if there is not sufficient progress on both Mexico’s immigration and China’s trade deal, the US will keep threatening with tariffs.

Currency Markets

Amid a relatively quiet calendar, the greenback was better bid on tariff hope. Major currencies were weaker against the US dollar on Monday.


Source: Bloomberg Terminal

The Antipodeans were the worst performers amid the broad-based strength on the US dollar. However, the openness of the Fed to cut interest rate limit the losses on the Aussie dollar, which remains at 69.59 US cents.

The British Pound remained under pressure as the Brexit hardliners are having the upper hand in the lead for a new Prime Minister. On the economic front, the sluggish Manufacturing and Industrial Production reiterated the economic backlash caused by the ongoing Brexit chaos.

Commodities Market

The rout in the oil markets continues despite the momentary relief of Friday when Baker Hughes report reported a drop of 11 rigs. However, a slowing global economy, the prospect of a deepening trade war, and the American oil boom are painting a near-term bearish outlook for oil prices. The next catalyst will be the decision by top producers of extending the output deal.

WTI is back to trading $53.47 while Brent Crude oil is trading in the vicinity of $61.92.

UKOUSD and USOUSD (Daily Chart)


Source: GO MT4

Investors retreated from safe-haven assets on positive trade comments which sent Gold on the offer. After reaching a high above $1,340 last week, XAUUSD struggled to find demand on Monday and dropped to a low of $1,325.10 before rebounding to $1,329.

XAUUSD (Daily Chart)


Source: Bloomberg Terminal

Cryptocurrencies

After last week retracement phase, major cryptocurrencies staged a comeback. Even though the correlation of Bitcoin with other the markets are still unclear and there was no clear driver behind the recent surge nor the downward correction, the revival of the crypto market came at a time of market angst, which sent a signal that digital currencies might be seen as a safe-haven asset.

Bitcoin reclaims the $8,000 level.

BTCUSD (Hourly Chart)


Source: GO MT4

Key Upcoming Events Ahead

Claimant Count Change, Average Earnings, ILO Unemployment Rate (UK)
Producer Price Index (US)

Wednesday, 12 June 2019
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0 0 0.054 0.046 0 0 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0 0 0 0 0 0 0

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