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Dow surges by 396 after China U.S resume trade talks; USD mainly lower to risk holds to CAD; Gold’s plunge stalls

Aug 17, 2018 | Market Updates

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22:30 CAD CPI

U.S markets closed higher overnight, the Dow surged posting its best single-day gain since April after the U.S and China resume trade talks. Gains in Walmart, Cisco Systems, Boeing and Caterpillar added to the Dow’s 396 pts rally but analysts see trade talks as the main driver.

“This move in the market, I think, is almost entirely related to China,” said Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research. “I know it’s not resolved but the fact that they are talking is enough for the market to go up.”

The S&P500 added 22.32 and the Nasdaq closed 32.41 pts higher. In data news, weekly jobless claims totalled 212,000 last week, below the Reuters estimate of 215,000. Housing starts totalled 1.168 million in July, coming in below the expected 1.26 million.

Europe closed higher boosted by news China will resume talks with the US over trade. The DAX added 74.16, the FTSE gained 58.51 and the CAC closed 43.81 higher. Corporate earnings also boosted sentiment but Turkey continues to simmer in the background. U.K retail sales figures in the grew faster than expected in July.

Oil held after testing $64 support. USOUSD added 44 cents closing at $64.78. Demand outlook remains gloomy. Oil market sentiment remains cautious overall after U.S. crude output and inventories rise. Weak Asian markets are starting to eat away at crude demand.

Gold bounced back from new major lows set during yesterday’s Asian session. After buyers posted a $7 rally, price fell away settling slightly lower at 1173.98. price is trading slightly higher this morning but trade could continue cautiously.

Currencies rebounded to the USD and JPY yesterday. The AUD GBP and EUR all closing higher to a mixed USD and posted higher closes to the Yen. U.S China trade talks and calmer situation with the Turkish Lirea giving risk a floor to move from. This morning risk is edging higher to the USD and JPY. The USD is making gains to the CAD and JPYin morning trade.

Local ASX200 has hit the green with positive leads coming from trade talks. The AUS200 8 pts higher, buyers have tested 6330 this morning. If buyers can maintain momentum we could see a new shot all-time record 6331.40. Asian shares are mixed with the Nikkei 80 pts higher and the Hangseng 223 pts lower.

AUS200 hits new records this morning.

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Sources; CNBC – All times are AEST

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