Daily Market Report by GulfBrokers 2020-2021

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The computer hardware maker NVIDIA (NASDAQ: NVDA) announced its first-quarter earnings results on Thursday. The company revenue from gaming products grew 27 per cent in its last quarter while revenues from the Datacenter division grew 80 per cent to $ 1.14 billion. During the quarter, Nvidia completed its $7 billion acquisition of Mellanox Technologies, a maker of key technologies for connecting its chips in data centres.
  • Earnings per share (EPS) $1.80 vs. $1.69 expected
  • Revenue $3.08 billion vs. $3 billion expected
Read more- https://gulfbrokers.com/en/nvidia-g...-2-million-and-q1-revenue-from-gaming-grew-27
 
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In the Currency market, the pound continuously trading weaker against the euro and the dollar on Friday after weaker-than-expected UK monthly retail sales report. Moving ahead to the last week of this month the investors and traders have become increasingly concerned about the UK’s economic health going forward. The currency has come under pressure after BoE’s stance on negative interest rates and the preparations for a no-deal Brexit. According to economists polled by Reuters, Britain is headed into the most severe economic recession in hundreds of years as a result of the coronavirus pandemic.


These are the few reasons why the pound trading lower against other currency pairs:


  • The British pound started this week with a bearish note, on Monday touched $1.2080 its lowest level since March 26th. The pound dropped after the Bank of England official Haldane said that the central bank is examining a range of unconventional policy tools, including negative interest rates. 'The economy is weaker than a year ago, and we are now at the effective lower bound, so in that sense, it's something we'll need to look at - are looking at - with somewhat greater immediacy,' he remarked in an interview. Later during the European session, the pound rebounded to 1.22 after hitting two-month lows.

  • On Tuesday the Sterling traded steady as the UK unemployment rate unexpectedly falls to 3.9% from 4% in the previous period and below market expectations of 4.4%. Another factor involved in the GBP recovery after the UK government announced a new tariff regime, known as UK Global Tariff (UKGT).

  • During Wednesday the British Pound struggled to edge higher after UK CPI slowed to 0.8% in April 2020, from 1.5% in the previous month and slightly below market expectations of 0.9%. That was the lowest rate since August 2016.

  • On Thursday the currency pair slightly rebounded after better-than-anticipated UK PMI prints for May. The services PMI increased to 27.8 in May 2020 from an all-time low of 13.4 in the previous month. Meantime, British Prime Minister's official spokesman said on Thursday that the country has agreed on a deal with a pharmacy company to acquire antibody tests.

  • Today we saw the UK April retail sales slumped to -18.1% vs. -15.5% expected, it is the biggest plunge in retail sales due to the coronavirus pandemic. While the core retail sales also missed expectations and fell 15.2%. On the other hand, sales for non-store retailing jumped at a record 18 per cent and sales for alcohol stores went up 2.3 per cent. The Pound dropped to the session low 1.2160 after the weak economic data.

$GBP/USD Technical outlook


gold

The British Pound is the worst performing G10 currency so far this month. The Pound has been under pressure as investors expect an interest rate cut below zero by the Bank of England later this year. Technically the GBP/USD pair trading bearish after the price breaks Thursday low. Overall the movement remained bearish throughout today and at the time of writing the price trading below $1.2180. In the short term if the price breaks below 1.2165 which would open doors towards to May's low of 1.2085 and below that 1.20/1.1980 is next. On the upper side the first immediate resistance around 1.2250 and then 1.23.

 
GBPUSD recovered from the early losses against the US dollar after buyers found short term support near the 1.2160 area. Overall the movement remained bullish throughout the Asian session, at the time writing the pair trading near 1.2270. Meantime, UK Prime Minister Boris Johnson announced that some shops will be able to reopen from June 15.

Important levels to watch today: 1.2300 and 1.2160.

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The Alibaba stock slid as much as 4% in Hong Kong on Monday after the e-commerce giant has forecasted slow growth for this year. The company projected sales of about 650 billion yuan ($91 billion) and fourth-quarter profit fell 88% from the same period a year ago. The (NYSE: BABA) stock price was down 6% to $199.70 during the last trading session on Friday. "The pandemic has fundamentally altered consumer behaviour and enterprise operations, making digital adoption and transformation a necessity," CEO Zhang said.

EQUITIES


Global stocks gained on Tuesday amid hopes of a coronavirus vaccine after American biotech firm Novavax said it started the first human study of its experimental vaccine. The Nikkei 225 surged 529.52 points or 2.55% to 12-week highs of 21271.17 on Tuesday after Prime Minister Shinzo Abe lifted the state of emergency for all of Japan, including Tokyo and its surrounding areas.

OIL

Crude oil price rose after Russia reported that its oil output dropped to its target of 8.5 million barrels per day for May and June, in compliance with its OPEC+ deal.

CURRENCIES


The US dollar index slipped below the 100 level as a sign of improved market sentiment, though the vaccine hopes. The EUR/USD rebounded from yesterday’s low of 1.0869 to above 1.0940. The New Zealand Dollar surged higher after the trade surplus in New Zealand widened sharply to NZD 1267 million in April from NZD 361 million in the same month of the previous year.

GOLD


The gold price trading steady above $1720 on Tuesday as growing tensions over the Hong Kong national security law and escalation of conflict between US and Iran and Venezuela after a second Iranian vessel carrying fuel had entered Venezuelan waters despite US criticism as both countries are under US sanctions.

Economic Outlook


The US-based biotech company, Novavax, said on Monday it has started the Phase 1 clinical trial of the vaccine candidate and has enrolled the trial’s first participants, with preliminary results slated as early as July. Novavax will inject 131 volunteers in the first phase of the trial, testing the safety of the vaccine and looking for signs of its effectiveness.

Moving ahead today, the important events to watch:

U.S. CB Consumer Confidence – 14.00 GMT

U.S. New home sales report – 14.00 GMT

Coronavirus Update:
In India on Monday posted its biggest single-day jump in cases of COVID-19, overtaking Iran to become one of the 10 worst-hit nations. The news said “India reported another 6,977 cases, taking its total to 138,845. Total deaths have passed 4,000. In UK COVID-19 death toll rose to at least 47,347 on Tuesday. Meantime, UK: Prime Minister Boris Johnson announced that some shops will be able to reopen from June 15.

Technical Outlook

GOLD:
The gold price trading above the $1720 support zone during the European session.

The important levels to watch for today: Support- $1718 and $1700 Resistance- $1738 and $1750.

GBP/USD: The pair recovered from the early losses against the US dollar after buyers found short term support near the 1.2170/1.2160 area. Overall the movement remained bullish throughout the Asian session, at the time writing the pair trading near 1.2270.

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The important levels to watch for today: Support- 1.2200 and 1.2160 Resistance- 1.2290 and 1.2330.

Quote of the day: Unsuccessful people make decisions based on their current situations. Successful people make decisions based on where they want to be.
 
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Oil prices may have stabilized after plunging in response to the coronavirus and the price has surged more than 80% this month as demand returned following the easing of lockdown restrictions in some countries. Demand and supply fundamentals are getting better which is helping the oil market to recover from the coronavirus plunge. Another factor involved in the oil price recovery after OPEC+ countries cut crude production by nearly 10 million BPD starting in May.

Last week the US oil prices climbed to the highest level since March 11th after the EIA data showed the US crude inventories dropped by 4.9 million barrels in the latest week, the biggest drop so far this year. Meantime, China’s total crude oil imports in April amounted to 9.84 million BPD, up from 9.68 million BPD in March. China’s imports of Russian oil have risen 18 per cent in April year-on-year, according to Reuters. This month, for the first time since November, Chinese refiners will also receive their first crude cargo from the US.

This week Oil prices started with a positive note after the coronavirus vaccine news and Russia reported that its oil output dropped to its target of 8.5 million barrels per day for May and June. Moving ahead to the mid of the week investors continue to follow the new updates from the US and China trade talks and weekly oil inventory reports. Overall the movement remained bullish so far this week on optimism that the worldwide business reopening should boost the basic energy demand. Oil prices trading bearish on Wednesday as the sentiment soured once again escalating tensions between the US and China.

The WTI oil price recovered from the April’s lows, now consolidating after printing fresh May’s highs. At the time of writing the price dropped around 1% from the daily high. WTI is usually extracted from US oil fields in Texas, Louisiana and North Dakota and the price is a benchmark for US oil prices.

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Conclusion

So far this year the oil prices went through difficult times. But we hope the combination of production cuts and prospects of increasing oil demand continues to provide some support to crude oil prices. The IEA expects oil consumption eventually rebounding past pre-virus levels as lockdown restrictions ease, oil demand is expected to improve across several countries worldwide. Meanwhile, OPEC is scheduled to hold its next meeting early next month when supply cuts towards maintaining oil prices could be discussed.

 
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