This is the excerpts from my morning market view that is posted early in the morning in my blog. This is not a prediction or trading tip. This is an analysis of premarket macro narrative.
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Premarket analysis: 23 July 2020
Positives:
- Global markets are consolidating near tops
- Easy money from DMs are flowing to Emerging markets
Negatives:
- Pandemic is not over yet
- Better than expected quarterly results seems to be already priced in
Global Markets: -Mixed
European markets ended slightly in red while US markets added little more to their gains. Most of the indices in both European and US are re-testing their recent swing tops. The easy money provided by developed markets’ central banks are keeping the risk-on sentiment alive.
Risk assets: EM equity ETFs consolidated sideways yesterday. High yield bonds index continued to move up. Emerging Asia government bond index traded in Europe was sharply down suggesting that the foreign investors are booking profit in bond market as it has run up quite a bit.
Safe heaven assets: US Dollar index continues with its downward trend. Japanese yen was sideways. Gold shot up again on dollar weakness. Industrial metal copper was following Chinese indices and consolidated. Volatility indices are pointing downwards.
ASIA this morning: - Mostly in Red
The first flash purchasing manager’s index for the month of July’20 is out for Japan today. Although it was better than last month slightly, pace of recovery has slowed down and it is not enough to take economic growth to pre-COVID levels. Probably this is the indicator for the other Asian economies as well.
Most of the Asia equity indices are slightly in red and have paused on their upward push. European and US futures are trading flat in Asian session. SGX Nifty is trading flat compared to yesterday’s Nifty futures close.
Calendar Events:
There are no major economic data release scheduled for today.
Result announcement:
Today, HDFC AMC, BIOCON, ABB are the heavy weights that will be declaring their quarterly results.
India : -DIIs & FIIs are trading in opposite direction with sizable volume
FIIs continued to be net buyers in cash market and hold sizable long position in index derivatives’ open interest. Domestic institutions are holding sizable short position in all segments of derivative market. Be it Index Futures, options or stock options. Large proprietary traders are also holding short positions. The intraday whipsaw and volatile movements are due to DIIs and FIIs trading in opposite direction with sizable volumes.
How will Nifty perform today? Find out HERE
Disclaimer: Author is not responsible or liable, directly or indirectly, for any form of damages whatsoever resulting from the use (or misuse) of information contained in or implied by this posting. This should not be relied on as a source of financial, investment or trading advice. What works for one individual may not work for anyone else. Always consult and check with your financial advisor. I am an active trader therefore I have conflict of interest with whatever I have mentioned here.