News & Analysis
Lower than expected tariffs lifts stocks – Sends safe-havens lower to to risk Currencies; Bank of Japan heavy news day coming up
Upcoming high impact news:
Bank of Japan JPY – Monetary Policy Statement – BOJ Press Conference – BOJ Policy Rate all have a tentative release throughout the day.
18:30 GBP CPI
23:30 EUR ECB President Draghi Speaks
00:30 Oil Crude Oil Inventories
08:45 NZD GDP
Do expectations run the markets? Yesterday was a good example of this, new tariffs advised by the US and China failed to hit a negative extreme so we saw risk fire up with strong gains seen from stocks and risk currencies to safes havens.
US stocks recovered, the Dow Jones added 184.84 the S&P500 added 15.51 and the Nasdaq closed 60.31 pts higher. Nike and Boeing lifted the Dow. Tech stocks boosted the S&P and Nasdaq, Netflix, Amazon, Apple, and Alphabet all closing higher. Tariff saga, China announced tariffs targeting $60 billion worth in U.S. products after the United States slapped tariffs on $200 billion worth in Chinese goods. China also said it will put a 10% tariff on some goods it had previously earmarked for a 20% levy. This is after the Trump administration announced the U.S. will impose 10% tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25% at the end of the year.
“The market is thinking this wasn’t the worst-case scenario,” said Daniel Deming, managing director at KKM Financial. “That’s why you’re seeing this pseudo-rally taking place.”
European stocks also moved back into the green lifted by the better than expected situation tariff wise between the US and China. The DAX added 61.26 the FTSE lost 1.87 and the Euro Stoxx 50 added 9.25.
Oil prices increased by 1.4% overnight as signs build OPEC will not boost output. Reuters previously reported that Saudi Arabia wants oil to stay between $70 and $80. U.S. sanctions on Iran continue to support prices. U.S. shale output expected to rise in October. Trade war continues as a concern as it may cap demand. USOUSD climbed 89 cents closing at 69.41. $70 continues as mid-term resistance.
Despite a weaker USD, Gold fell by 3.48 cents. price continues to hold in a range seen from the daily chart. Better than expected tariff amounts kept the safe havens lower, risk rallied to the JPY and USD through the London and US sessions. The EUR ended lower to the USD, while the AUD had a solid session ending 38 higher to the USD and 81 higher to the JPY. After a small fightback, the USDCAD settled 50+ pips lower. Today traders will be looking to the Bank of Japan, the Monetary Policy Statement – Policy Rate and Press Conference will be released throughtout the Asian to Early European session.
The ASX200 is trading 19 pts higher and the Nikkei is 334 pts higher.
Good Trading from Eightcap
Sources; CNBC – All times are AEST
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