Euro & Industrials Lead Rebound
US virus cases rose another 1.7% on Sunday, above the 1.5% average. But it's a few hotspots that are concerning the market. Florida, Texas, Arizona and California all hit records in the past week and high frequency data is increasingly showing fewer restaurant visits and hours worked in those states, which collectively represent almost one-third of US GDP. Formally, governors re-closed bars in Florida and Texas and cut restaurant capacity.
The mood on Friday slowly soured and that resulted in a 2.4% decline in the S&P 500 with a close below the 200-dma.
Today, DAX attempts to regain its 200-DMA of 12152, DOW30 manages to protect the 24070 base support (backed by 248300 confluence of 55 and 100 DMA) and XAUUSD remains underpinned at 1754, eyeing 1790.
See how the levels mentioned above compare to the levels we mentioned hours ahead of Friday's close.
In the FX market, the reaction has been uneven. Risk trades in commodity currencies are playing out more clearly but elsewhere quarter and month-end flows are a factor. GBP is also suffering on the risk trade but Brexit news and a potential COVID-lockdown in Leicester are compounding worries.
Note that China was on holiday late last week but is back to start the new week.
CFTC Commitments of TradersSpeculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.
EUR +118K vs +117K prior
GBP -19K vs -16K prior
JPY +27K vs +22K prior
CHF +1K vs +2K prior
CAD -21K vs -25K prior
AUD -5K vs -7K prior
NZD 0K vs -2K priorAfter big moves into AUD and EUR last week, the shifts were much smaller in the last data. The lone notable shift was into JPY.
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