News & Analysis

Stocks mixed – Dow Jones Nasdaq small recoveries; Oil jumps hitting $70; Gold sinks to 6-month lows; Bitcoin back testing weekly lows

Jun 27, 2018 | Market Updates

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11:00 NZD ANZ Business Confidence
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Traders where tentative in last night’s U.S session. Small gains seen on the main indexes after Monday’s solid declines. The Dow Jones added 30.31, the S&P500 gained 5.99 and the NASDAQ reclaimed 29.62.

Mixed messages from the Trump administration regarding trade kept a lid on gains. “A lot of investors are taking a wait-and-see approach with the confusion around trade policy,” said Ryan Nauman, market strategist at Informa Financial Intelligence. But on the other hand, “the fundamentals have been phenomenal. I think all this trade talk is sort of dampening the excitement around the fundamentals.” President Trump threatened Harley-Davidson: If it moves overseas ‘they will be taxed like never before!’ Earlier this morning the Fed’s Bostic advised 3 Rate Hikes are favoured in 2018 but trade issues are causing firms to pause on aggressive investment.

Europe finished mixed as trade woes continue to unnerve sentiment. The EUR STOXX 50 closed 5.04high while the DAX lost 35.99 and the FTSE recovered 28.08. Uber is due to find out Tuesday if its attempts to overturn a ban to operate in London will be successful. U.K. financial mortgage approvals showed a further recovery in May following their first-quarter decline but remained below their 12-month average. In stock news Inmarsat sank to the bottom of the STOXX 600, dropping 12.5 % after Eutelstat Communication denied it would make a bid for the firm.

Oil surged during the U.S. session after basically treading water for much of the day. USOUSD jumped by 235 cents closing above $70 a barrel for the first time since the 24th of May. Price was supported by Canadian production losses and uncertainty over Libyan exports. Production problems at one of Canada’s largest oil sands facilities drove front-month U.S. crude to its highest premium above second-month futures since 2014. Eastern Libyan commander Khalifa Haftar’s forces have given control of oil ports to a separate National Oil Corporation based in the country’s east.

Gold tumbled breaching 6-month lows price pressured by prospects of rising U.S. interest rates amid a strengthening economy. U.S. Fed Chairman Jerome Powell last week said the central bank should continue with a gradual pace of interest rate rises amid a strong economy to balance its employment and inflation goals. Gold closed close to $6.50 lower at 1258.76 and at one stage traded down to 1254.75.

The USD held gains to most majors, failing to break resistance to the CAD. The Japanese Yen was stronger to flat to risk and finished lower to the USD. The U/J added 31 pips. Oil failed to help the AUD as it closed 24 pips lower the USD. The EUR and GBP both closed lower to the Yen and USD. Bitcoin has returned to lows testing 6040 this morning. Buyers are holding from this test for now, but overall selling pressure remains.

Good trading from Eightcap.

Sources; CNBC – All times are AEST

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