ZFX: Market sentiment was boosted? vaccine hopes again?

The US markets were closed on Monday for the Memorial Day holiday. However, the market moves showed that the investor sentiment turned to a bit bullish. Dollar dipped and the oil price rose, which were mainly due to the expectations of lockdown measures easing.

In the early session on Tuesday, the drop of the dollar and the rally of the stock market index futures of Europe and the US have implied the risk-on mode already. The vaccine news from Novavax, a vaccine development company of the US, was one of the factors. The company said  that it targets the first vaccine testing results in July.

ZFX analyst Jacob Leung said that vaccine news may be just for short term, but the economies reopening is now providing continual and fundamental support to the market, even in the situation of uncertainty. Of course, a more balanced oil market is positive to the sentiment.

Oil prices keep strong on Tuesday. The market expects the demand of crude oil will be back to normal within two months, on the other hand, the market also believes that the major producers will follow the commitments of the production cuts. That means, the demand and supply in the oil market is likely to make the balance sooner than expected.

ZFX analyst Jacob Leung said that although stock markets in Asia Pacific traded higher on Tuesday, investors may remain skeptical due to the rising tension between the US and China. Gold price is still trading at a relative high level, reflecting the safe-haven demand. It is cautious that any news from China-US situation can potentially trigger a reversal.

Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.