British pound trading at fresh monthly low ahead of Tuesday’s talks between UK Prime Minister Boris Johnson’s chief negotiator, David Frost, and the EU’s Michel Barnier in London.
“We need to see more realism from the EU about our status as an independent country”, “If they can’t do that in the very limited time we have left, then we will be trading on terms like those the EU has with Australia, and we are ramping up our preparations for the end of the year.” Boris Johnson's chief Brexit negotiator said. Meanwhile, UK Prime Minister Boris Johnson said that Britain was not afraid of a no-deal Brexit at all. If that happens, the UK will just move on, the PM said.
EQUITIES
Australian shares climbed for a second straight session after Prime Minister Scott Morrison announced that Australia will buy about 85 million doses of two potential COVID-19 vaccines if trials prove successful. U.S. S&P500 futures erased their Monday losses to trade 0.6% higher and Nasdaq futures standing flat after having lost more than 6% late last week.
OIL
Crude Oil prices trading lower after Saudi Arabia’s Aramco, the world’s top oil exporter, cut the October official selling prices for its Arab light crude. On the other hand, the number of coronavirus infections is continuing to climb higher across the US, Britain, and India, raising fears that governments could reimpose lockdowns which could further impede recovery in oil demand.
CURRENCIES
In the currency market, the EUR/USD trading unchanged on Tuesday after the Eurozone GDP contracted 11.8% on quarter in the three months to June of 2020, slightly less than initial estimates of a 12.1% fall.
GOLD
Gold price retreated from the early session highs, during the Asian session the yellow metal price rose to near $1935. Overall, the movement remained bearish throughout the European session.
Economic Outlook
On the data front, the Japanese economy shrank 7.9% on quarter in Q2, posting third straight quarter of contraction and the economy contracted an annualised 28.1% in April-June, worse than the 27.8% figure given last month.
On the US-China front, the New York Times reported that the US is considering banning some or all products made with cotton from China’s Xinjiang province. While US president Trump indicated that in the future, his administration would prohibit federal contracts with companies that outsource to China. “Whether it’s decoupling or putting in massive tariffs like I’ve been doing already, we will end our reliance in China, because we can’t rely on China,” Trump said.
Coronavirus update:
The number of people infected with the coronavirus across the world hit 27.3 million, of which at least 892 thousand people have died and 18.3 million have recovered, according to data released by the Johns Hopkins University. The United States has passed 6.2 million confirmed cases, with over 188,000 deaths from COVID-19, the highest numbers in the world. India has recorded the highest number of coronavirus deaths in a month. The Ministry of Health says 1,133 people have died from COVID-19 in the past 24 hours, bringing the total death toll to 72,775.
Technical Outlook
XAU/USD: The gold price hovers near the support zone of $1920 during the European session, any break below the level the next downside to watching $1900.
The important levels to watch for today: Support- 1910 and 1900 Resistance- 1940 and 1955.
EUR/USD: The currency pair testing 1.3100 zones, any break below this level the next level to watch at 1.3080 and 1.3040. On the upper side, the immediate resistance at 1.3160/80.
The important levels to watch for today: Support- 1.3100 and 1.3080 Resistance- 1.3160 and 1.32.
Quote of the day: If you are going to invest in an internet stock, you must be a long-term investor, Jeff Bezos.
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