US Dollar Squeezed and Stocks Stall as Traders Await Stimulus

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China-US rising tensions and sobering economic data slowed down momentum from the Asia stock markets, although hopes of monetary stimulus prevented falls and maintained pressure on the US Dollar as traders await congress to make a deal on the fresh spending package.

US DOLLAR

The MSCI’s greatest index of the Asia-Pacific shares from japan hit the early session 6.5 months high, plunged to become flat after the decline in Hong Kong and China.

Also, the European markets seemed poised for a soft open with the Eurozone STOXX 50 futures fell by 0.4%, and while the S&P 500 held steady and the FTSE futures fell by 0.6%, not to forget Japan’s Nikkei fell 0.5%.

The Australian index and the Australian dollar surged back after the government of the united states hiked its jobless forecast and stated that new lockdown restrictions will cut approximately 2.5% points from the 3rd quarter growth.

This came after very weak U.S employment numbers overnight that have traders seriously attentive on the USA labor data release later on Thursday and Friday. The same happens for the unexpectedly dire 16.5% plunge in Philippine growth.

President Trump’s administration stepped up its efforts to purge the untrusted Chinese apps from the United States networks also weighed on Alibaba, WeChat owner Tencent, and general sentiment as Soybean Slumps As USDA Crop Rating Beats Market Estimates.

Nevertheless, none of the news was bad enough to typically jam the stock markets into a fall or shake traders’ faith that central banks and governments will ease up on the stimulus in the next few months.

Technically speaking, traders already know that the markets are currently in a cyclical upside trend. This uptrend is typically driving the inflation expectations much higher and lending more support to growth stocks and gold stocks while at the same time undermine the US Dollar as it yields plunge.

The 10-year US (TIPS) Treasury inflation-protected security yields dropped to a new low of -1.071% on Thursday with the US Dollar hovering just above the 2-year trough. Also, the nominal USA yields increased as new touch as traders brace for a new issuance wave.

On the other hand, Gold held steady over $2000 per once rose back towards the fresh high on Wednesday.

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