19 August: Overnight Market Wrap

19 August: Overnight Market Wrap

Key Notes:

S&P and Nasdaq close at new record highs as risk remains supported

USD weakness continues, GBP best performer on the day

Gold closes up $18 at $2002 after volatile trading session

The S&P500 and Nasdaq indexes continued their trajectory higher buoyed by tech stocks with the former now up 54% from the coronavirus dip mid-March, and the Dow having a another down day as financials struggle in this low rate environment. The USD was on the back foot once again for most of the day in Asia and Europe but we saw a correction in the US session. EUR had climbed to 1.1965, AUD broke recent resistance to climb to 0.7264 and Gold had squeezed to 2016 from 1983 in Asia before a wash out in precious metals saw Gold dump $30 back to 1980 and bringing a surge in the USD back to life with all G10 following suit. Gold regained its momentum and closed back at 2002, likewise AUD moved back higher, however EUR remained under some pressure. The outlier was Cable which remained supported the whole day without any real catalyst and still uncertainty over Brexit talks looming in the background. The pound closed up 130 pips on the day. On the political front we heard Trump state that he postponed the talks last weekend with China and has no plan to reschedule at this time. Markets are ignoring all trade talk rhetoric and purely focusing on the free money pouring into risk assets. RBA minutes came and went yesterday without fanfare and little reaction for the currency. AUD remained well supported against the USD and most trading pairs with AUD/JPY now looking bullish for the first time in three months. Which probably means we are near the peak! Inflation data releases from UK, Europe and Canada dominates before we get a look at the FOMC minutes.

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