Análisis de mercado diario

The Dollar index (DXY) is halting its slump, after registering losses in six consecutive daily sessions to now test the 98.35 support level. With the Dollar-funding crunch easing, given that the Federal Reserve has worked with other central banks to improve the global financial markets’ access to the Greenback, the DXY's declines appear to have fizzled out.

Demand for King Dollar should remain elevated, as the global economy enters a recession due to the Covid-19 pandemic. This suggests that the easy gains enjoyed by other currencies vs. the USD over recent sessions may have run their course. The US non-farm payrolls due this Friday, along with other global economic indicators to be released this week, will be used by investors to ascertain the potential severity of the economic contraction.

OPEC+ could flood markets on April 1

Brent prices began the week by sliding below the $27/bbl psychological level, while Crude is testing the $22/bbl mark and is trading around its lowest levels in 17 years. Global markets risk being flooded with cheap Oil supply on Wednesday, April 1, after OPEC+ producers are released from their existing supply cuts deal. The quarantine measures across major economies have resulted in an unprecedented plummet in demand, and the global recession should snuff out hopes of a swift recovery in the markets, barring any supply-side interventions by major producers.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Asian currencies and equities are offering a tepid response following news that the death toll from the coronavirus’ spread has climbed to 25, with new cases being reported in more countries, such as Vietnam and Singapore. The subdued trading volumes in the region ahead of the Lunar New Year festivities are likely preventing a more pronounced reaction in the markets.

Market participants perhaps can take heart from China’s efforts to lock down the epicenter of the outbreak by imposing travel curbs on seven cities, and the World Health Organization’s holding back from labelling the situation as a global health emergency. With several Asian markets seeing a holiday-shortened trading week ahead, investors will be hoping that the outbreak doesn’t worsen over the coming days. Still, regional markets could see an outsized reaction when trading resumes should pent-up concerns be unleased if the virus’ spread worsens drastically over the near-term.

However, any such reaction may eventually prove transitory, as long as the still-fragile expectations for a stabilising global economy in 2020 aren’t shattered. Once investors’ fears thin out, that could allow risk-on catalysts such as positive US corporate earnings or macroeconomic data to punch through meaningfully in the markets.

Gold, Yen offer muted reaction so far to coronavirus concerns

In a rather subdued response to the spread of the coronavirus, Gold and the Japanese Yen have seen limited moves over recent days. Bullion prices have refused to stray too far from the mid-$1500 range, while USDJPY appears content trading around the 109 to 110 range.

While not wanting to get too far ahead, fears over a potential pandemic are still supporting these safe haven assets. As the situation stabilises, investors may gradually eschew safe haven assets in favour of more risk-taking activities in the markets, which should prompt eventual softness in Gold and JPY.

Oil prices set to extend weekly losing streak

Unlike Gold and JPY, Oil traders apparently have fewer qualms offering a starker reaction to the viral outbreak. Brent crude dipped below the $62/bbl handle and is on course to mark three consecutive weeks of declines, while winding back most of its gains from December.

The price action of late highlights the notion that demand-side uncertainties are in the driver’s seat when dictating the overall mood in the Oil markets, with investors apparently more willing to brush aside supply-side risks, given recent geopolitical events involving Iran, Iraq, and Libya.

However, from a technical perspective, Brent futures are moving closer to oversold territory. Oil prices could see a rebound once the fears surrounding the coronavirus’ spread can begin retreating, allowing for global trade and travel conditions to stabilise, and by extension, prop up the world’s demand for Oil.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Asian stocks and currencies are mixed leading up to the long-awaited signing of the limited trade deal between the US and China, amid concerns that major differences are set to persist between the two economic giants. Hours before the trade deal is formalised, investors were met with headlines about potential plans by the US administration to block exports to Huawei, coupled with media reports that any further tariff relief affecting $360 billion worth of Chinese goods shipped to the US may only go into effect after the US Presidential elections in November.

With the optimism surrounding the US-China “phase one” trade deal largely priced in, risk assets may be triggered into a knee-jerk reversal if the released details from the signed trade deal underwhelm investors. Still, considering the diminished prospects of a tariff escalation between the US and China, the global economy is expected to enjoy some measure of relief in 2020 after having weathered heightened trade tensions over the past two years. Should the macro data over the coming months point to a meaningful recovery in economic conditions worldwide, that should encourage further upside for riskier assets, with emerging-market assets poised for gains under such risk-on circumstances.

Dollar sees diverging performance against G10 vs. Asian currencies

The US Dollar has seen a year-to-date decline against most Asian currencies, but has strengthened against all of its G10 peers so far in 2020. Although the Dollar index (DXY) remains above the psychological 97.0 handle at the time of writing, the DXY is still expected to ease over the coming months, having posted lower highs and lower lows since October, as investors with heartier risk appetites expand their reach into the markets.

Over the near-term, a better-than-expected print in the December US retail sales figures should also buffer the DXY’s presence above the 97.0 mark, as consumers Stateside continue propping up the economic growth momentum. Further support for the Dollar index may be derived from the waning Pound, amid rising expectations that the Bank of England could lower interest rates this quarter.

Commodities check: Gold, Oil to see contrasting fortunes as global economy recovers

Gold prices have come off overbought levels and are finding a more sustainable footing around the mid-$1500s for the time being, with investors eager for details surrounding the expected rollback in tariffs. Bullion is expected to ease further as long as risk-taking activities can continue in the markets unperturbed while the global economy attempts to take advantage of thawing US-China trade tensions.

Brent is finding its immediate support at $64/bbl, with concerns over the US-Iran conflict now phased out and with investors having mostly priced in the US-China “phase one” trade deal signing. However, key details from the agreement that could significantly alter the outlook on global demand may yet hold sway over Oil’s performance, whereby further indications over the dismantling of tariffs could spell more upside for Oil prices.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

2020 kicked off with a spike to Oil prices, as a sudden escalation in geopolitical concerns permeated market sentiment following the US airstrike in Iraq. WTI crude briefly breached $63.80/bbl as it claimed a year-to-date gain of 3.26%, while Brent broke above $69.00/bbl before moderating its way to a 3.94% gain so far in 2020.

The heightened tensions in the region should keep Oil prices elevated over the near-term, as market participants brace for any further moves by either Iran or the US that could ramp up supply-side concerns. As such fears gather a bigger crowd, that could easily send Brent well above $70/bbl and WTI past $65/bbl.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

The first full trading day of 2020 is upon us!

After what had been a stellar 2019 for many, market participants are making their way back after the year-end festivities to offer some equilibrium to major asset classes.

The Dollar index’s post-Christmas slide appears to be halted at 96.0 for the time being, as the DXY bounced off that psychological level to currently trade around 96.2. Still, more Dollar moderation could be in store if risk appetite shifts into higher gear on the back of a faster global economic rebound. However, given that the Federal Reserve is not expected to lower US interest rates further this year, that should gradually knock the wind out of the Dollar bears’ sails.

Safe haven gains halted as Dollar finds floor

Despite the risk-on environment, Gold and the Japanese Yen have certainly benefitted from the Dollar’s decline, gaining 3.6 percent and 0.8 percent respectively in December. After those year-end gains, Bullion appears to be settling around the $1520 mark for the time being, while the Yen’s gains have been capped at the 108.5 support level versus the US Dollar.

The market action suggests that it’s been a Dollar-driven theme that’s played out in these assets over recent weeks. Investors are now questioning whether this upward trend has run its course, considering that conventional wisdom calls for declines in safe haven assets amid heightened risk appetite. Safe haven assets are expected to adjust further as investors restore market volumes to normalcy.

Brent slides back below $67/bbl

Oil bulls have found it hard to justify the case for keeping Brent above the psychological $67/bbl level. With the Dollar pausing its decline for the meantime, Oil is lacking the catalyst for another push higher. From a fundamental perspective, investors will be closely monitoring OPEC’s decision on whether to prolong its output cuts past March 2020, amid hopes that global demand can stage enough of a recovery and stop the world from tilting into oversupplied conditions.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.