DAILY MARKET REPORT - Wed, Sep 23, 2020

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Reserve Bank of New Zealand maintained its official cash rate at a record low of 0.25%. The RBNZ Monetary Policy Committee said it would keep the OCR at 0.25% for at least a year and planning to introduce a Funding for Lending Programme (FLP) before the end of this calendar year. The Committee noted low population growth and rising unemployment could "constrain further house price increases". The central bank also retained its large-scale asset purchase (LSAP) programme at NZ$100 billion ($66.2 billion).

EQUITIES

On Tuesday, Wall Street ended higher after Fed Chair Jerome Powell said the U.S. central bank is committed to helping the economy. He said that the US Central Bank was committed to using all of its monetary policy tools for as long as necessary, in order to support the global economic recovery. On the other hand, U.S. Treasury Secretary Steven Mnuchin said the White House continues to seek an agreement with both parties in Congress on another fiscal relief package. The S&P 500 added 1.1% and the Nasdaq Composite rose 1.7%, while the Dow Jones Industrial Average was up 0.5%.

OIL

Crude oil prices trading unchanged on Wednesday. According to the latest API report, the crude inventories in the US increased by 691k barrels during the previous week. On the other hand, Eurasia Group expects oil demand around the world to fall by over 10% YoY to around 90 million bpd.


CURRENCIES

In the currency market, the New Zealand slide below 0.66 after RBNZ left the OCR unchanged at 0.25%. Meanwhile, the British pound extends lower after UK Prime Minister Boris Johnson was forced to impose new restrictive measures to curb the rapid spread of the coronavirus.

GOLD

The Gold price slipped below $1900 again on Wednesday, facing a third-straight loss amid a strengthening dollar.

Economic Outlook

On the US-China front, a Chinese newspaper said that the local government would not approve the Oracle’s proposed deal to acquire a stake in ByteBance’s TikTok in an effort to handle US operations together with Walmart.

On the data front, UK Composite PMI dropped to 55.7 in September 2020, compared to market expectations of 56.3. Eurozone Composite PMI decreased to 50.1 in September of 2020 from 51.9 in August and compared market forecasts of 51.7.

Moving ahead today, the important events to watch:

US – Manufacturing PMI: GMT – 13.45

US -Crude oil inventories: GMT – 14.30

Coronavirus update:

The number of people infected with the coronavirus across the world surpassed 31.6 million, of which at least 970 thousand people have died and 21.7 million have recovered, according to data released by the Johns Hopkins University.

Technical Outlook

EUR/USD:
The currency pair trades back to above 1.17, during the European session the pair hits fresh monthly low of 1.1670.

euraud


The important levels to watch for today: Support- 1.1670 and 1.1640 Resistance- 1.1735 and 1.1770.

GOLD: The yellow metal recovered from the early session lows, at the time of writing the gold price hovers near $1890 zone.

audusd


The important levels to watch for today: Support- 1870 and 1862 Resistance- 1890 and 1900.

Quote of the day: Good day traders do not have big swings or big losing days. A good day trader is very conservative and picks his spots closely- Edward Franco.

Read more- https://gulfbrokers.com/en/daily-market-report-172
 
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