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MTrading Team • 2023-08-21

Oil price recovers on China stimulus amid dicey markets

Oil price recovers on China stimulus amid dicey markets

Market sentiment remains dicey as traders prepare for the all-important central bank speeches at the Jackson Hole Symposium. Also challenging the momentum is the mixed feelings about China as the nation’s stimulus measures fail to renew the market’s confidence.

With this, the US Dollar pares recent gains but the Gold fails to cheer the Greenback’s retreat. That said, AUDUSD and NZDUSD print mild losses whereas EURUSD and USDCHF gain the most among the G10 currency pairs.

It’s worth noting, however, that Brent Oil rises for the third consecutive day and braces as traders anticipate more efforts from Beijing to defend the world’s second-largest economy from losing the recovery moves.

Equities futures in the US and Europe print remain indecisive but Asian stocks edged lower. Furthermore, BTCUSD and ETHUSD register the first daily loss in three as market players fear the US SEC’s fight with the industry players, despite relinquishing control over the ETF approvals for Ethereum.

Following are the latest moves of the key assets:

  • Brent oil rises for the third consecutive day despite lacking upside momentum around $85.50 of late.
  • Gold price remains indecisive at the five-month low, making rounds to $1,890 by the press time.
  • USD Index prints mild losses at the highest level in 2.5 months, down 0.10% intraday near 103.30 as we write.
  • Wall Street benchmarks closed mixed and so did the stocks in the Asia-Pacific zone. That said, equities in Europe and UK print mild gains by the press time.
  • BTCUSD and ETHUSD snap two-day rebound from the lowest level since June, near $26,000 and $1,670 at the latest.
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China fails to improve sentiment

Although the People’s Bank of China (PBoC) announced rate cuts and the Chinese authorities brace for fiscal measures to infuse liquidity into the world’s second-largest economy, the risk appetite remains even. The reason for the sluggish markets could be linked to the cautious mood ahead of top the US frontline data and central bankers’ speeches.

Even so, firmer yields and anxiety about the higher for longer rates, as well as the geopolitical concerns about Russia and China, challenge the optimists.

With this, the traders witness a lack of direction even as some pairs and assets consolidate the previous week’s losses while the US Dollar bulls take a breather.

It should be noted that the mixed NZ trade balance and downbeat German Producer Price Index failed to impress the trader’s community amid cautious markets.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

Nothing major to follow

Given the light calendar and anxiety before the frontline data/events, the market players are likely to witness a dull start to the key week for the central bank watchers. Apart from Friday’s key Jackson hole speeches, US Durable Goods Orders and the first readings of August PMIs for major economies also become important to watch for clear directions.

May the trading luck be with you!