News & Analysis

10 Year note yield hits highest level in 4 years; Equities mainly higher; USD stalls – JPY higher; Gold and Oil bounce back.

Feb 23, 2018 | Market Updates

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US markets – traded mixed on Wednesday, we saw gains on the Dow Jones +167.70, and the S&P500 2.63 but the NASDAQ continued south losing 8.14 points. The NASDAQ posted its longest losing streak since November 2016. Gain’s where trimmed on the DOW and SP500 as 10-year note yields hit their highest point in 4 years. Continuing the rates issue for traders. Investors got more news out of the Fed on Thursday. Atlanta Fed President Raphael Bostic said things continue to “look up” for the U.S. economy. St. Louis Fed President James Bullard, meanwhile, told CNBC’s “Squawk Box” that too many rate hikes could slow down the economy too much. New York Fed President William Dudley delivered prepared remarks but did not address monetary policy.

Oil – bounced back adding 130 cents to close back above $62. Traders found support from $61.20, buyers found a boost as U.S. crude inventories unexpectedly fell 1.6 million barrels in the week to Feb. 16, as net imports dropped to a record low and exports surged, according to data from the Energy Information Administration. Analysts had expected an increase of 1.8 million barrels. Traders could keep an eye on 62.80 as it’s starting to show short-term resistance on the 4-hour chart.

European markets – traded mixed with falls on the FTSE -29.18 points and on the DAX -8.58 points. The CAC closed higher adding 7.06 points. Miner Anglo American’s stock rebounded, closing up 0.19 percent the day its latest earnings report was released. It was over 2.5 percent lower hours earlier. Barclays reported weaker-than-expected earnings Thursday. A below-forecast 10 percent rise in annual profit for 2017 was hit, in part, by the U.S. tax overhaul and a weaker dollar. But, its shares closed up 4.4 percent. The GER30 CFD is showing support at 12,356 and resistance at 12,505 setting up a short-term range. The UK100 has set up a higher low from 7208 short-term support.

Forex – saw the USD pull back and the Japanese Yen continue higher. Second Estimate GDP in the UK came in lower than expected. The ECB Monetary Policy Meeting Accounts failed to have an impact on the EUR. The EURUSD (+50 pips) and AUDUSD (+45pips) closed higher snapping losing streaks. The GBPUSD ignored the GDP data to close 35 pips higher. The Japanese Yen came back to life, knocking the majors lower. The USDJPY failed at the resistance point we tweeted yesterday to close 100 pips lower. The GBPJPY lost 105 pips and has returned to its 148.85 low.

Gold bounced closing $7.40 higher fueled by a weaker USD. Sellers tested and were unable to break its support low. Once the USD started its decline sellers evaporated, setting up the rally.

EURJPY – has once again returned to an important support level. This level has held for buyers since the 25th of September. The ball sits in the seller’s court right now, can they break or will buyers resume their stand?

Good trading from Eightcap.

Sources; CNBC. All times are AEDST

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