Equities Jump On Trade Optimism

Equity markets rose on Wednesday after reports emerged that China was open to a partial US trade deal. The comments come amid China asking the US to remove the 28 entities from the blacklist. It is likely that the markets will continue to monitor the developments. So far, there has been no official word and most of the gains were led by rumors. Both Bloomberg and the Financial Times reported the positive developments citing “unnamed sources”. The rebound comes after equities fell on Tuesday due to dimming prospects of a deal.

 

EU Offers to Make Concessions on Brexit Deal

A day after EU leaders shrugged off the Brexit proposal, reports showed that EU officials were ready to make concessions. The EU is looking at an option to offer a mechanism for Northern Ireland to leave the backstop after a number of years. The reports come as the deadline for the October 31st Brexit deal looms closer.

 

Sterling Stays Muted to Brexit Developments

GBPUSD remained rather flat. Price action was seen testing the lower end of the support at 1.2203. It later bounced back higher after testing this level but prices remain caught to the upside of 1.2291. As long as the support holds, the currency pair could remain flat. But the bias is building up to the downside. A breakdown below the support could signal a decline to 1.2082.

 

Crude Oil Inventories Continue to Build-Up

The weekly oil inventory report from the Energy Information Administration (EIA) saw another week of rising inventories. For the week ending October 4, commercial crude oil stockpiles rose 2.9 million barrels. This marks a fourth consecutive weekly increase in oil inventories. The EIA, earlier in the week, released a report where it lowered the crude oil price target to $57.00 by the second quarter of 2020. This was down from the previous estimate of $62.00 a barrel.

 

WTI Crude Oil Attempting to Rise Higher

Oil prices are seen posting a bottom near the 51.70 level. Price action managed to rise to the upside at 53.55. A breakout above this level will confirm the upside bias. The divergence on the four-hour chart remains which indicates the upside. In the near term, watch for price action to close above 53.55 to confirm further gains.

 

Gold Stays Subdued after Powell’s Speech

Gold prices were seen recovering from declines earlier in the week. Fed Chair Powell, in a speech said that the central bank would restart its balance sheet program once again. The Fed chair said that the central bank will start purchasing treasury bills. The move comes after the Fed initially started to unwind the balance sheet that it amassed during the QE era.

 

XAU/USD Retests Upper Range. Will it Breakout Higher?

Gold prices were seen rising back to the upper end of the range at 1508. The gains in price action come after gold prices initially slipped to the downside. However, gold needs to break out to the upside rather convincingly in order to confirm further upside. A close above the 1508 level will potentially see gold prices rising to the next upside target of 1532.