News & Analysis
US Tech worries – Trumps vs Amazon continues; Oil sinks by 3%; Gold jumps – USD falls on renewed China trade fears.
Upcoming high impact news:
Ôû© 14:30 AUD RBA Rate Statement
Ôû© 18:30 GBP Manufacturing PMI
US markets – started the new quarter lower as the tech sector worries continue to hurt investor sentiment. The Dow fell as much as 758.59 points and hit a new low for the year on Monday, falling below the low touched during the slide in February. Amazon fell after President Donald Trump tweeted on Saturday that Amazon was scamming the U.S. Postal Service, adding the service loses “billions of dollars” delivering packages for the e-commerce giant. Amazon has been one of the best-performing stocks over the past year, rising nearly 64 percent in that time period. Facebook, Netflix and Alphabet also closed sharply lower, dropping 2.8 percent, 5.1 percent and 2.4 percent. The Nasdaq plunged 193.33 and the S&P500 dropped 58.99 points.
Trade worries re-flare, China announced overnight Monday it had implemented tariffs on 128 types of U.S. imports. The goods hit with the charges the list of products proposed by Beijing in March. Trump linked his proposal to build a border wall between the U.S. and Mexico to ongoing NAFTA negotiations between the two countries. In a tweet Sunday, Trump said: “They must stop the big drug and people flows, or I will stop their cash cow, NAFTA. NEED WALL!”
European markets – Finished the last session of March higher the Auto sector performing the best. Renault shares were up by 6 percent following a media report that the company could merge with Nissan. German unemployment figures reached a record low in March at 5.3 percent. The U.K.’s current account deficit was ┬ú18.4 billion in the last quarter of 2017 beating expectations. With Monday’s roller coaster we could see a weaker session tonight.
Oil – Had a wild session on Easter Monday dropping by 3% before settling back in the $63s. Moving in a $5 daily range in thinner trade. Oil prices fell as geopolitical concerns that bolstered the market last week faded. Rising Russian output and U.S.-China trade tensions weighted on trader sentiment. “There is speculation that the Saudis are going to lower prices for their Asian customers,” said Bob Yawger, director of energy futures at Mizuho in New York. “That is not really the kind of thing you do when you want to keep production cuts in place.”
Forex – Monday saw a decline on the USD, with trade fears being the big issue once again. China has slapped extra tariffs of up to 25 percent on 128 U.S. products including frozen pork, as well as on wine and certain fruits and nuts, in response to U.S. duties on imports of aluminium and steel, China’s finance ministry said. The USDJPY continued its slide losing 28 pips and trading lower this morning. The GBP, EUR and AUD had mixed sessions to the USD on Monday. The JPY traded stronger to the majors on Monday, the EURJPY losing 60 pips. Trade was thinner than normal on Monday due to the Easter Monday holiday. Gold jumped on the renewed trade fear worries adding $15.60. Price trading a further $1.50 higher this morning.
Gold – trade fears kicking up again was the driver for yesterday’s rally, but if you look at the green zone you can see a nice test and fail by sellers setting up a doji bar. Demand was confirmed once buyers broke 1328.70. This move could be impulsive, buyers have 1346.00 to beat next.
Good trading from Eightcap.
Sources; CNBC. All times are AEST
* 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.