Análisis de mercado diario

Asian stocks and currencies are mixed as investors grapple with the extent of the coronavirus outbreak and its potential implications on the global economy. While these are still early days, the reported cases have evoked fears of a repeat of the 2003 SARS virus outbreak. Amid hopes that the authorities in affected countries are better equipped this time around following other epidemics over the years, the losses in risk assets should prove transitory as long as investors’ fears can be reined in.

This outbreak is sure to test the risk appetites of investors who have already overcome the flare-up in the US-Iran conflict earlier this year. However, should the World Health Organization label this outbreak as an international public health emergency, that could catalyse further losses in riskier assets while boosting demand for safe havens. If the authorities around the world show signs of failing to contain the coronavirus for an extended length of time, that could prompt a sustained risk-off period in the markets.

Dollar traders keep watchful eye over Trump impeachment trial, virus outbreak

While the Dollar index (DXY) has recovered from the oversold conditions seen at the onset of 2020, it still appears dampened below its 200-day moving average for the time being, as its downward trend since October is showing signs of levelling out.

The Dollar and US equities have offered scant reaction to the impeachment proceedings against US President Donald Trump thus far. But should the trial in the Senate unveil any material information that threatens policy continuity, then financial markets may react negatively to the added uncertainty. Given the Greenback’s status as a safe haven asset, the Dollar could however find near-term support if the fallout from the coronavirus outbreak is reflected in the hard data and threatens the stability of major economies.

$1600 within reach for Bullion if virus concerns escalate

Gold has quickly given up its recent gains following initial reports of the coronavirus outbreak, with Bullion moderating back below the $1560 psychological level. The case for Gold breaching and staying above $1600 will become stronger if there are more widespread cases of the coronavirus, coupled with lingering concerns over geopolitical risks. However, once such fears subside and investors can refocus on the global economic recovery, Gold is then expected moderate over the course of the year.

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.

• US indices near record highs after Trump’s impeachment
• Sterling slumps more than 400 pips from 19-month post-election high
• Bank of England to remain cautious at today’s meeting

The S&P 500 snapped a five-day winning streak to close slightly lower on Wednesday. Despite the slight retreat, investors still seem in a risk-on mode with all US major indices trading near record highs. Markets have largely shrugged off President Trump’s impeachment on Wednesday night as investors remain confident that the Republican-controlled Senate will vote against removing Mr. Trump from office. Instead, it’s the positive signs from the announced trade agreement that continue to dominate market direction.

With the holiday period to come, the S&P 500 is up 27.3% year-to-date and the tech heavyweight Nasdaq has surged 33.1% in what has been an exceptional year for investors and one that will be difficult to beat in the upcoming decade.

Sterling sheds all post-election gains

After climbing to a 19-month high of 1.3514, the Pound has lost more than four big figures in the past three trading days. The steep selloff has been driven by concerns that the UK may leave the European Union at the end of 2020 without a trade agreement in place. Prime Minister Boris Johnson is expected to publish legislation this week that will prohibit an extension of the transition period beyond December 2020. This means a no-deal Brexit remains on the table and that will prevent the Pound from testing new highs in the short term.

The Bank of England meets today and despite a major hurdle being cleared in the wake of the market friendly Conservative’s victory, the Bank is likely to remain cautious. Markets are anticipating a slightly more hawkish tone, but given that a hard Brexit remains a possible scenario, business investment and hiring are likely to remain muted in the first half 2020. Hence, the Bank is likely to keep its options open, including a rate cut if data deteriorates further. Expect this meeting to have little influence on the Pound as Brexit will continue to dominate the currency’s direction.

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 are mixed, as investors continue contemplating the ramifications from the “phase one” US-China trade deal. While the rollback of tariffs is set to brighten the outlook for Asian economies, it remains to be seen whether the region can pick up enough momentum to take full advantage of the receding trade tensions. Should the economic data over the coming months uphold such a notion, that should spur on more risk appetite, which bodes well for assets across the emerging-markets complex.

Dollar set to end 2019 on resilient note

The impending impeachment vote against President Donald Trump, though harbouring the potential to trigger knee-jerk reactions, is not expected to have a meaningful impact on the Dollar’s performance going into the new year. The Dollar Index’s (DXY) presence above the psychological 97 level has been justified by the resilient US economic data, as evidenced by the latest factory manufacturing and home construction data, while aided by the weaker Pound. The upcoming US Q3 GDP data should also keep DXY above 97.0, provided the official print is in line with market expectations at 2.1 percent, while a better-than-expected GDP revision could send DXY towards the 97.5 mark.

Sterling could be in for more volatility in 2020

Despite the Pound’s recent drop, the immediate support level for GBPUSD has shifted higher to 1.30, now that UK election risk is behind us. Still, 2020 could be another volatile year for Sterling, as the UK seeks to shape its future relationship with the European Union by year-end, with the risk of a hard Brexit apparently still on the table. Should a hard Brexit become likelier as the year progresses, that could prompt GBPUSD to trade closer towards the lower 1.20s.

Oil sustained by demand-side optimism

Brent’s rise above the $65/bbl psychological level demonstrates the risk-on sentiment in the markets, with demand-side uncertainties dialed down following the limited trade deal between the US and China. Moving forward, supply-side risks could still serve as a drag on Oil prices, with non-compliance among OPEC+ members, rising US inventories, and shale output being the key factors to watch, as well as any surprise spike in geopolitical tensions involving Oil producers.

Gold bulls need strong reason to break above $1500

Gold prices continue to remain supported, despite its bias to the downside, pending further details on the expected US-China trade deal. Still, potential gains for Bullion appear capped at the $1500 level, unless Gold bulls are shown signs that the global economy is not in a position to take full advantage of the expected rollback in trade tariffs in 2020.

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.

• Trump Impeachment inquiry has limited effects on financial markets
• Fate of US-China trade deal remains uncertain
• High beta currencies fall on weak economic data

US equities hit a new record high on Wednesday as the first public hearing in the Trump impeachment inquiry kicked off. Several hours of Q&A with two State Department officials about US policy in the Ukraine did not seem to move markets. Investors felt there hadn’t been any new information that will garner Senate Republicans support to remove President Trump from the White House.

As long as the impeachment inquiry doesn’t force any major shift in opinions, especially within the Republican party, the whole process will be considered as noise with little or no impact on financial markets.

What seems to matter the most at this stage is the signing of the Phase one US-China trade deal. Equity markets have been rallying across the globe over several weeks in anticipation of this getting through before year-end. This suggests a large portion of such an agreement is already priced in, and to see another leg higher in risk assets depends on the details of the deal and whether another one comes through in the forthcoming months.

The latest reports weren’t encouraging. The Wall Street Journal reported that the US and Chinese negotiators had hit a roadblock over agricultural purchases. According to the Journal, China is hesitant to commit to specific purchase amounts of farm products. The US also wants concessions from China on intellectual property protection and forced technology transfer but this hasn’t been agreed so far.

If a deal doesn’t go through in the next couple of weeks, the optimism seen in financial markets will rapidly turn into pessimism and I wouldn’t be surprised to see a 5-10% correction in equity markets. At this stage, markets are in a wait-and-see mode until further developments emerge.  

In a speech yesterday, Fed Chair Powell reiterated that he is content with the communication of a pause in interest rate cuts and the current stance of monetary policy will remain appropriate as long as incoming data is consistent with the Fed’s outlook.

Uncertainty over trade and poor economic data from China, Australia, and Japan, led investors to the safety of the Japanese Yen and Swiss Franc as high beta currencies got hit. Retail sales, industrial production, and fixed asset investments from China all surprised to the downside. Meanwhile, Australian employment suffered its largest drop in three years, suggesting that further stimulus is still needed.

The Australian dollar fell below 0.68 for the first time since mid-October, meanwhile the Yen strengthened against its major peers.

The Euro continued to hover around 1.10 against the Dollar as investors await German GDP which is expected to show a 0.1% contraction for Q3. Unless we see a significant surprise in German growth figures, I don’t expect the Euro to move either way. Markets have already priced in a technical recession in Germany, but forward-looking indicators such as the ZEW survey have been pointing towards an improved outlook for the economy.

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.