Still, shares in Hong Kong (-0.57%) ticked lower, but gains were dominant elsewhere. The ASX 200 and Nikkei advanced 1.55% and 1.40% respectively, as Kospi gained 1.17%.
Having managed to rapidly reverse earlier losses on Thursday, the European indices are set for a positive start to the last trading day of the week. The FTSE 100, more shaken than injured, will likely close the week flat above the 6200p mark.
WTI crude rebounded from $37 per barrel and prepares for another attempt above $40. But fears of further damage to the global oil demand could eclipse that caused by the optimism of seeing more fiscal and monetary stimuli and cap the upside potential above the $40 mark.
Robust demand in safe haven assets tells that investors remain prudent despite a synthetically boosted risk appetite. Gold remains bid above the $1750 per oz as the downside risks in equities prevail on the back of a clear negative bias in global news. Meanwhile, the depressed US yields give a further support to the precious metal keeping the cost of opportunity at very low levels.
In the currency markets, the US dollar index remains steady near the 97 mark.
The EURUSD sees dip-buying demand below the 1.12 level and should keep its head above the critical 1.1160 Fibonacci support unless we see a sudden deterioration in the global risk appetite.
Cable consolidates near the 1.24 handle and the downside pressure in sterling dissipates as the ‘moment of truth’ in Brexit negotiations are pushed back to October, pulling a certain pressure off the investors’ shoulder. But the EU expects a political compromise from the UK in next week negotiations, and the UK remains firm on its decision to not make any compromise. So, the pound bulls will continue walking a tightrope, which should limit the upside potential before the 200-day moving average, 1.27. The Bank of England’s (BoE) Quarterly Bulleting will likely maintain the emphasize on increased risks to the economic outlook due to the pandemic and the lingering Brexit uncertainties, but market reaction should remain muted.
By Ipek Ozkardeskaya
