FX Update: Frenzied equity market not yet driving notable FX volatility
While the volatility in US equity markets raised eyebrows and drove the usual directional moves in FX one associates with safe haven seeking, the transmission effect into FX was very weak as broader measures of risk sentiment were little affected. Things could change however if the volatility continues, the reflationary background narrative suffers further doubt and the USD and JPY start to punch through technically pivotal levels.
Bloodbath in US technology stocks – what comes next?
US technology stocks experienced a bloodbath yesterday down 5% driven by a technical feedback loop in the options market and the underlying equity market. Our view is that the market will rebound and we remain longer term positive on equities as the rebound narrative is unchanged.
Market Quick Take - September 4, 2020
US equities suffered their worst session since June in an ugly all-day slide that was indiscriminate but worst in percentage terms for the mega-cap US stocks that were bid so aggressively on the way up. The ugly action points to a fragile market and volatility may persist here as traders adjust.
Gold tests support on dollar turnaround
Gold and with that also silver have reversed lower following the dollars abrupt turnaround on Tuesday. While the long term outlook remains supportive, the short-term technical outlook has deteriorated with three lower highs pointing to a loss of momentum. We take a closer look at the levels to look out for in gold and given the current importance of the dollar also the levels in EURUSD.