Stocks
Stocks regained ground following a selloff earlier this week on worries over dislocations in the oil market. The Senate has given the latest US stimulus measures, the green light. Another factor contributing to the more positive sentiment: loosening of lockdown restrictions in some parts of the world amid signs that the slowing spread of the COVID-19.
Oil Moves Higher
But the feel-good story of the day has to be the fact oil prices are stabilizing. With the market warming up to the idea of the US congress painting the energy ticker-tape green with a thick coat of proration, oil prices are ripping higher into the London open. And a plethora of cross-assets including CAD, AUD, and oil majors are hitching a ride on WTI's coattails as S&P 500 is now zeroing in the psychological 2800 level. But probably rational to temper expectations as it's going to take more than a celestial alignment to get WTI above $20 this month.
You can almost sense a sigh of relief that not only are oil prices stabilizing and rising but the US dollar is weakening, which is a substantial positive for global risk sentiment.
Gold Ready To Lift Off
Gold is looking to lift off again. The nutshell view is that gold investors are more impressed with the bullish aspect of more fiscal spending than with the bearish impact of higher equities. But toss in a weaker dollar for good measure and markets could be staring down $1725 + quickly.
EU set to resume infighting
With the EU set to resume their infighting on a conference call today, the Italy downgrade (or no downgrade) this Friday amid an increased focus on peripheral debt widening, the Euro has been struggling for traction the past 24 hours. But establishing an economic recovery fund even without joint liability could prove to be positive for euro-denominated assets. But with EU leader lagging way behind the response curve, something should emerge.
Asia Currencies
USD/CNH is following the broad dollar weakness lower but holding in a confined range. Equities are flattish with outflows despite the risk recovery overnight and in some other markets this morning.
MYR is trading stronger with support form energy stocks and improving USD liquidity. Spot opened at 4.37 and has traded down to 4.350nd traded down to 1228.4 before retracing to 123
On a similar note, the USD/KRW is offered with higher equities and improving USD liquidity. Spot opened at 1235 and traded down to 1228. The market remains wary of the uncertainty around North Korean leader Kim Jong-Un's health and seems to be reducing positions. The fourth round of USD liquidity injection settlement date is today, and with dividend-related repatriation pressure on USD funding, the curve is rallying,
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