26 August: Overnight Market Wrap

26 August: Overnight Market Wrap

Key Points:

US consumer confidence 84.8 from 93.0 expected. A 6 year low

Nasdaq & S&P500 close once again at record highs, Dow lags

Gold finds support on move back to recent lows at 1915

US consumer confidence fell to a 6 year low and stock markets rallied. Makes perfect sense! Once again the Nasdaq and S&P500 close at record highs while the Dow Jones slipped just slightly into the red for the day as vaccine talk continued to dominate risk assets. The USD slipped back from Mondays gains with upbeat reading from the German IFO pushing EUR/USD back to 1.1840. CAD, AUD and NZD were once again supported and moved back higher vs the greenback alongside the better risk on mood. Metals muddied the water with Gold falling back to recent support at 1910/15 once again which had a knock on effect into the crypto market pushing BTC back down to 11,250 off its recent highs above 12K. Earlier in the Asian session we had heard positive comments from both China and the US alleviating some of the recent tension between the two countries but we wont see the details until after the US election and well into Q1 2021. However, the positivity was set the tone for the better risk trading environment. Overall markets remained cautious ahead of Fed’s Powell address at Jackson Hole tomorrow where we are likely to start seeing bigger price action moves as markets position themselves for the September FOMC. Rumours are doing the rounds that UK PM Johnson may be looking to resign within the next 6 months due to his own lingering coronavirus health issues, however I doubt there’s any truth to this story. GBP remains unchanged and had a good day across the board. On the data front the highlight will be US durable goods. Expect a holding pattern until we hear from Powell.

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