Market News & Analysis

Stocks and EUR rebound after Trump delay’s auto tariffs

May 16, 2019 | Market Update

High-impact economic news:

11:30 am AUD Australian Employment Change and Unemployment Rate 

01:15 am CAD Bank of Canada Governor Poloz Speaks

Trade and tariffs continue as the main driver for traders and investors, we got off to another soft night in Europe with the main indexes and European currencies making new declines. The DAX and CAC were all trading deep into the red approaching the NY session. The EUR failed to hold a third intaday rally moving 23 pips lower at one stage to the USD. 

U.S. futures moved into the NY session start in the red. Sentiment took a sharp turn back to the positive after president Trump announced that there will be a 6-month delay in auto tariffs. this was mainly going to affect the EU and Japan. “If you look at today’s market action, it does show how sensitive investors have become to trade news,” said Jeff Kravetz, regional investment director at U.S. Bank Wealth Management. “What it may do is put equities in a range-bound mode as investors wait on the outcomes of trade tensions.”

This news had a dramatic effect on European markets, the DAX erased all losses and finished the session 107 pts higher. The EUR jumped back to the USD paring losses. Trade is really dominating atm, the EUR ignored German Prelim GDP coming in at 0.4% which was expected and good news under the current German economy questions, and also ignored an increase of 0.3% employment in the Eurozone. 

Gold had a saw-saw session due to trade news, the yellow metal rallied on negativity gaining $3.79 before finishing lower after the tariff delay hit the market. Oil gained despite rising U.S. stockpiles which for now are being offset by rising tensions in the Middle East.

The ASX200 has started the session with small gains, local traders will be looking to today’s employment data, if we see bad numbers this could reinforce future rate cuts and will do more damage to the AUD. We’d think after last night’s tariff comments the Nikkei could bounce back in today’s session. 

Last night’s reversal on the GER30 (DAX)

Good trading from EightCap

Sources – CNBC

* The information provided here has been prepared by EightCap’s team of analysts. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and do not reflect the opinions of EightCap.

In addition to the disclaimer on our website, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. EightCap accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

Please note that past performance is not a guarantee of or prediction of future performance. This communication must not be reproduced or further distributed without prior permission.

 

 

 

 

 

HEAD OFFICE

Level 6, 360 Collins Street
Melbourne, VIC
3000 Australia

Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with EightCap, and seek independent advice if necessary. Forex and CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing substantially more than your initial investment). A Product Disclosure Statement (PDS) and a Financial Services Guide (FSG) for our products are available to download from our Legal Documentation page. You must assess and consider them carefully before making any decision about using our products or services.

EightCap is a registered business name of EightCap Pty Ltd (ABN 73 139 495 944). We are regulated by the Australian Securities & Investments Commission (ASIC) - our AFSL number is 391441. This licence authorises us to provide financial services to people in Australia.

The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.