Investing.com | Sep 04, 2019 07:30
Global stocks and futures on the S&P 500, Dow and NASDAQ 100 rebounded this morning as political risk in Hong Kong, Italy and the U.K. eased.
Italian shares led the European rally, as chances of an agreement over a new coalition government increased. The STOXX 600 saw all 19 sectors gain ground, with retail and banking shares at the forefront.
Meanwhile, British Prime Minister Boris Johnson sought to call snap general elections after losing his first vote as country leader in the House of Commons. Investors seemed to reward the vote results—which in theory curbed prospects of a no-deal Brexit—pushing both the FTSE 100 and the pound higher.
Technically, the U.K. benchmark reached the highest price since June 10, but must contend with its broken uptrend line since the December bottom.
For its part, cable is correcting after posting a bullish hammer within a falling channel on Tuesday.
As for U.S. contracts, technically they are all nearing the top of a pennant, bearish after the late July-early August plunge. They are also all trapped between the main MAs, with the 200 MA supporting the pattern, the 50 MA resisting a breakout and the 100 MA staying within the range.
Overall, while the S&P 500 and the Dow Jones are beneath the uptrend lines since the December lows, the NASDAQ Composite returned above it last Monday.
h2 Global Financial Affairs/h2In the earlier Asian session, Hong Kong’s Hang Seng (+3.90%) led all regional indices higher, surging on reports that Carrie Lam, Chief Executive of the city, will withdraw the controversial extradition bill that sparked mass civil protests three months ago.
Technically, the index completed a small H&S pattern—within a falling channel since April—whose development recently triggered a death cross. As things stand, short-term momentum remains to the upside, but within a medium- and long-term downtrend.
The yield on 10-year Treasurys also rebounded. However, the U.S.-China trade headwind still looms over the market, with Moody’s seeing further escalation .
Technically, yields may be in the process of developing a rounding bottom.
The dollar slipped back below the Aug. 1 high, after yesterday’s shooting star marked a higher peak in the uptrend. We could expect the Dollar Index to retest August highs at 98.40. On the other hand, the USD may be bottoming out with an H&S pattern.
XAU Daily Chart
Gold gave up half of yesterday’s advance, extending a congestion to the seventh consecutive session after an H&S top failure.
Crude oil pared almost half of Tuesday's drop on concerns of a global slowdown hitting demand, but remained below $55.
h2 Up Ahead/h2Canadian Exports and Imports for July are released on Wednesday.
Canadian Trade Balance for July is released on Wednesday.
Canadian Labour Productivity for Q2 is released Wednesday.
Stocks
Canada’s S&P/TSX Composite closed down 0.26 percent on Tuesday.
Currencies
The Canadian loonie was up 0.07 percent against the U.S. greenback early
Bonds
Canada’s 10-year yield was up early Wednesday at 1.140, a 2.33-percent increase.
Commodities
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