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US index got callback

26 Mar, 2020

Gold seemed not really positive

Data and news released yesterday:

The two parties in the U.S. Senate and the White House have reached an agreement on a 2 trillion yuan economic stimulus plan. After the subsequent Senate vote, it still needs to wait for the house of representatives to pass.

Federal Reserve Brad: the blockade is not controlled by anyone. Unless people feel safe, the United States will not return to normalcy. Inflation is expected to fluctuate sharply in the next few quarters.

The ECB said it would restart its direct currency trading Program (OMT) if necessary to buy unlimited government bonds.

The Bundestag of Germany has considered and approved a huge economic assistance plan to help enterprises and employees cope with the impact of the COVID-19.

The EIA report: commercial crude oil inventory excluding strategic reserves increased by 1.6 million barrels to 455.4 million barrels.

 

Market Volatility:

The dollar fell sharply, with the dollar index refreshing its low since March 19 to near 100.84, down 0.81% overall.

The euro rose 0.87% to around 1.0882 for the third day in a row; the German house of Commons on Wednesday suspended the "debt brake" provision of the Constitution and approved the large-scale economic stimulus plan of Chancellor Angela Merkel's government.

USD/JPY were close to flat at 111.21; the yen was still close to a one month low; the market saw demand for the US dollar as the Japanese fiscal year neared its end.

The pound rose 1% to near 1.1878; market analysis showed that the resistance level of pound was around 1.2125/30, and the key support level was around 1.1412.

The spot gold fell back from its high position, with the deepest drop of more than 2% in the intraday, hitting a fresh low of $1595.13/oz; the global stock market rose sharply, and the market risk preference recovered, weakening the attraction of safe gold, and the safe buying of gold was restrained.

WTI crude oil futures in May rose $0.48, or 2.00%, to $24.49/barrel; Brent crude oil futures in May rose $0.24, or 0.9%, to $27.39/barrel.

 

CWG future forecast:

This trading day focuses on data such as US initial jobless claims, GDP and PCE, the Bank of England's interest rate resolution and minutes of the meeting, the Fed's one week balance sheet and the G20 special summit. The market is still focused on the economic and political measures taken by governments to prevent and control the epidemic.

Institutional Analysis: according to market analysis, the impact of the coronavirus pandemic on the pound is far from that of Brexit or the financial crisis in 2008. Last week, the pound hit a new low against the dollar for more than 30 years, approaching an important level of 1.14, which is an unprecedented period, indicating that the pound is now more vulnerable than ever.

 

Financial calendar:

15: GfK consumer confidence index of Germany in April

Monthly rate of retail sales after Rose adjustment in February in the UK

17: 00 ECB releases economic forecast

20: 00 Bank of England announces interest rate resolution and meeting minutes

20: 30 number of initial jobless claims for the week from the United States to March 21

Monthly wholesale inventory rate of the United States in February

20: 30 US real GDP annualized quarter rate in the fourth quarter

Annual rate of core PCE price index in the fourth quarter of the United States

At 04:30 the next day, the Federal Reserve released its weekly balance sheet

 

CWG financial knowledge:

Final value of us real GDP (annualized quarterly rate): released by the US Department of Commerce, it is recognized as the best indicator to measure the national economic situation. It can not only reflect a country's economic performance, but also reflect a country's national strength and wealth. Higher than expected GDP figures tend to be positive for the dollar, while negative for the dollar.

 

CWG Markets, as a fully authorized and regulated trading service provider of FCA, the contents and opinions contained in this article are only general information and do not take your investment objectives, financial situation and investment needs into account. Any reference to historical price fluctuations or price levels is based on our analysis and does not indicate or prove that such fluctuations or price levels are likely to recur in the future. CFD is a complex instrument, and there is a risk of rapid loss due to leverage. You should consider whether you understand how CFD works and whether you are able to take the risk of losing money. If you have any questions, please seek advice from an independent consultant. For more details, please visit www.cwgsvg.com to obtain and refer to the company's risk disclosure summary.