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So much for a pause in the action, as ” Sell All” battle cries are ringing out across trading floors again.
Complicating matters was this mornings gap lower in the SPX which we are directly attributing to the fall out from the Huawei headlines. Reports that Canada has arrested the Huawei CFO facing US extradition for allegedly violating Iran sanctions.
As if the market needs more headline risk, this news is quite significant as the US government is attempting to persuade allies to stop using Huawei equipment due to security fears, is triggering a sell-off in Tech. Recall that over 100 Chinese companies trade limit down when news broke the US urged allies to blacklist Huawei.
Risk sentiment continues to melt in Asia which is having a far-reaching effect across global equities and currency markets
USDJPY is trading in risk-averse mode selling down to critical 112.70 zones while the SPX is taking on a decidedly bearish profile as it moves ever so near this morning Gap open
While the EUR has held relatively neutral, traders are testing the downside for Aussie ass the bearish setup continues to intensify.
The market is wholly buried right now, and if we look at yesterday horrendous Q 3 Australia GDP coupled with no purposeful rebound in Eurozone data, risk sentiment is going to struggle dearly even more so with G-20 euphoria thoroughly diluted. Factor in an expanding global growth sinkhole compounded by China on the cliff edge of contraction adding to the gloom. And just because Powell has walked back some of the hawkishness, it means little as RBA is on hold at 1.5 for continuity, while omnipresent credit /housing concerns continue to weight in the background pointing to a dovish interpretation. Aussie looks very susceptible.
Oil prices are for the most part non-reactive today and predictably so with OPEC decision looming
However, gold continues to find a bid as a confluence of market negatives continues to see investors place equity market hedges into Gold