News & Analysis

Equity markets continue rally; Majors drop to the USD; Trump proposes new tariffs this morning – sending stock futures crashing; Super Friday NFP – Carney – Powell to come tonight

Apr 6, 2018 | Market Updates

Upcoming high impact news:

Ôû©22:30 CAD Employment Change – Unemployment Rate
Ôû©22:30 USD Average Hourly Earnings – Non-Farm Employment Change – Unemployment Rate
Ôû©01:15 GBP BOE Gov Carney Speaks
Ôû©03:30 USD Fed Chair Powell Speaks

Trade War Flare Up – this morning President Trump said he has instructed the United States Trade Representative to consider $100 billion in additional tariffs against China. Shortly after Trump’s announcement, U.S. Trade Representative Robert Lighthizer expressed support for the move, calling Trump’s response “appropriate.”

Markets reeled on the news Dow Jones futures dropping more than 400 points. CFD indices have seen sharp falls after relative stability sent prices climbing to new weekly highs. Some of the biggest falls; US30 -476 at lows, GER30 -183 at lows, Oil -91 cents at lows and Gold climbed by $6.40. Markets are starting to par loses at the moment. FX markets took the news better than expected, we haven’t seen any jumps by the Yen. The USD pushed higher to the AUD and EURUSD gained. Volatility remains high and it’s a real reactive market right now with any new news, we could see sharp moves as witnessed in Wednesday’s session. Traders should take more care in these types of situations due to the high level of unpredictability.

On top of the current trade issues, super Friday starts tonight with US employment data and Canadian employment data, later in the night Bank of England’s Carney speaks and Fed chair Powell speaks to finish off a busy night.

US markets – closed higher on Thursday, the Dow Jones added 240.92 pts, the S&P500 added 18.15 and the NASDAQ closed 34.44 pts higher. Trade was a lot more stable than Wednesday’s session. Where we saw the Dow Jones rally more than 700 points from its session low. Tech helped lead the move higher, with Facebook jumping 2.7 percent and gains of more than 1.5 percent in Netflix and Amazon. Chipmaker Advanced Micro Devices also rose 2.6 percent after Stifel upgraded them to a buy from hold. “This is a market for seasoned and experienced investors,” said Alicia Levine, head of global investment strategy at BNY Mellon Investment Management. “We have some serious policy issues that are at the forefront.” “It’s going to be a rocky market moving forward, but that doesn’t mean there’s something rotten at the core of it,” Levine said.

European markets – made sharp gains on Thursday, the FTSE surged 165.49 higher, the DAX jumped by 347.29 and the CAC soared by 134.87 points. Trade was thick and confident in Europe. The EURO STOXX 600 added 2.4% as every sector ended in the green. Basic resources and technology stocks were the top-performing sectors, each up over 3 percent. Accor Hotels announced it is buying a 50 percent stake in Mantis Group, expanding its presence in Africa and in luxury travel. Ubisoft topped the gains after the success of its latest video game “Far Cry 5” led to a ratings upgrade.

Oil – moved lower into last night’s London session losing 59 cents before paring loses into the New York session to finish flat. “Oil prices are profiting from the general brightening of sentiment on the markets as signs emerge that the trade dispute is easing between the U.S. and China,” analysts at Commerzbank said in a note.

Forex – the USD made gains to risk overnight with the GBP and EUR having decent falls. The Cable fell by 73 pips. The Japanese Yen was the weakest currency last night losing ground to all the majors. The USDJPY broke out further to upside adding 60 pips and closing above 107.30. Gold lost $6.28 overnight backing up Wednesday’s strong fade, buyers did stem the flow once 1324 was hit. This level is seen as current support.

Stock indices reaction to Trump’s additional tariffs this morning.

Good trading from Eightcap.

Sources; CNBC. All times are AEST

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