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Mixed results could be seen in the foreign exchange market as the pound sterling (GBP) and the Japanese yen (JPY) overall improved, the euro and the US dollar (USD) were under pressure. In emerging markets the South African rand (ZAR) and the Mexican peso (MXN) traded weaker by Thursday morning, while the USD/TRY pair briefly tested a new al-time high just above the rates recorded last week but stopped further advances for now.
Gold prices remained steady at around $1,900 per troy ounce. Silver prices were also almost unchanged, while palladium started a slow recovery after the recent plunge. Oil prices managed again to push higher, potentially helped by the higher than expected weekly draw on oil stockpiles as reported by the API.
Major stock market indices continued to move lower at the start of the European trading session. Besides the fading hopes on a prompt new stimulus bill in the US, the rising number of COVID-19 infections could also have affected sentiment.
On Thursday weekly oil market data will be released by the EIA. Also the weekly US jobless claims statistics can be expected. In terms of quarterly results still Morgan Stanley and Walgreens Boots will publish quarterly results.
Despite the weakened dollar, the EUR/USD pair was unable to advance higher on Wednesday, remaining mostly just around 1.175 with further downside recorded by Thursday morning.
European industrial production continued improving in August but even then it was down by 7.2 per cent compared to the same month of the previous year. Now that more and more COVID-19 infections are reported and governments are again taking restrictive measures the future of the recovery remains to some extent unclear.
On Thursday import and export price data, the Empire State General Business Conditions survey and weekly jobless claims data will be published in the US.
After some European stock markets managed to close even with an upside on Wednesday, like the Italy 40 or the Spain 35, key European stock indices opened lower by Thursday morning. They were also under pressure following the negative global sentiment in the markets as the US lawmakers are still failing to come to an agreement over further stimulus measures before the US Presidential Election at the beginning of next month. What could also be of concern is the steady rise of infections with the novel coronavirus, prompting multiple countries in Europe to introduce again more restrictions, while at least for now for the most part staying away from such strict lockdowns as they were instituted in countries like Spain and Italy, lighter lockdowns are starting to be introduced. France will introduce in some heavy populated areas including the capital Paris a night time curfew for at least four weeks.
On Thursday in Germany construction permit data and in France consumer price index (CPI) statistics will be published. The French luxury goods company LVMH is also releasing its quarterly earnings after the end of the trading session.
Oil prices continued improving over the course of the trading session on Wednesday. One key factor could have been the weekly report from the American Petroleum Institute (API), which indicated that over the course of the past week crude oil reserves surprisingly reduces by 5.4 million barrels.
This comes despite reports that according to OPEC, the US energy industry is recovering faster than anticipated. While OPEC+ seems to be in compliance with the set agreement levels, there are still concerns what the long-term plans of the cartel could be, given that the current oil price of marginally above $40 per barrel is still significantly below the target level for example Saudi Arabia is seeking for a balance budget, while on the other hand from the demand side there are concerns over more restriction in Europe as multiple countries recently reported their highest ever daily new COVID-19 infection count.
On Thursday the Energy Information Administration (EIA) publishes its weekly statistics on crude oil, gasoline and distillate stockpiles.
Key US stock indices continued reversing lower, with the gains attained on Monday by now practically gone.
One of the best performing stocks was the food delivery app company GrubHub (+7.33%), whose stock price jumped to a new 1-½ year high. This comes after the company announced a deal with ride-hailing app Lyft (+1.36%) in a bid to compete with Uber’s (-1.15%) food delivery business.
Bank of America (-5.41%) was one of the worst performing stocks that day, following disappointing quarterly results. Profits were marginally better than expected, but the reported revenue of $10.1 billion fell short of expectations, while the bank also had to make more than a billion dollar provisions due to defaulting loans.
For investment bank Goldman Sachs (+0.02%) profitability was no issue as it had the most profitable quarter in ten years, reaching a return on equity of 17.5 per cent. The company’s leadership also indicated that the company operates in a “robust revenue environment”.
On Thursday among others investment bank Morgan Stanley and the pharmacy chain Walgreens Boots will publish their quarterly results.
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