News & Analysis
Tech continues falls; Oil hit Gas stockpiles increase; Yen surge hits Majors; NFP data tonight
Upcoming high impact news:
22:30 U.S. Employment Data
USD Average Hourly Earnings EXP 0.2%
USD Non-Farm Employment Change EXP 191K
USD Unemployment Rate EXP 3.8%
22:30 Canadian Employment Data
CAD Employment Change EXP 5.1K
CAD Unemployment Rate EXP 5.9%
Basically Groundhog Day for U.S. stocks last night, tech continued to push lower while the Dow made another 20 point rise. Trade issues continue to hold trader confidence at bay. The U.S. and Canada restarted talks on Wednesday these are set to continue after last Friday’s trade meeting failed to find an agreement. U.S – China trade remains tense, markets remain in wait-and-see mode after a report from Bloomberg last week revealed that the U.S. administration was on standby to inflict additional levies on $200 billion worth of Chinese goods as soon as this week. China’s commerce ministry stated Thursday that Beijing would retaliate if Washington was to inflict new tariffs, Reuters reported. The deadline for comments on the proposed tariffs is at midnight. -CNBC
Tech shares continued lower sending the Nasdaq 72.45 pts lower, this also pressured the S&P500, it finished the session 10.55 lower. The Dow Jones added another 20 pts is a choppy session. Key weighted stocks waiting on clear direction form ongoing trade issues.
Jobs data – ADP and Moody’s Analytics showed privet companies added 163K jobs but this fell short of the 190K forecast, with tonight’s NFP data to come. “The ADP data fell well short of expectations; however, the disappointing statistics mean very little for tomorrow’s Nonfarm Payrolls reading,” said Jeremy Klein, chief market strategist at FBN Securities, in a note. Klein noted the two reports have differed by an average of 57,000 in the past year and that weekly jobless claims remain near multi-decade lows.
European stocks declined further, trade worries and emerging market concerns continue to hold buyer confidence at bay. Basic resources stocks led Europe lower, down 1.75%, as traders continued to worry over the possibility of a trade war between two of the world’s largest economies. Mining firm BHP Billiton and copper producer Aurubis were the worst sectoral performers, both down around 5%. -CNBC The DAX fell by 85.21 the FTSE lost 64.32.
Brexit concerns remained after Germany said it was ready for all scenarios, including a no-deal.
Gas inventories sunk oil prices further this week as they showed an unexpected increase while crude inventories pulled back. Yes, crude drawdowns are bullish but rising gasoline inventories can and will offset this and send crude lower. Price fell by a further 1.4%. USOUSD dropped back to around 66.84 before paring some losses to close at 67.68.
Gold stated seeing buyer interest during the Asian session and rallied to 1207 before pulling back and closing at 1199.74. Price is trading slightly higher this morning. Short covering and a mixed USD the main factors overnight. Looking at the USD it had another tussle last night trading mainly lower before fighting back to the EUR and AUD late into the NY session. The GBP closed higher maintaining its mini-run post-Brexit news. This strength looked like it could reverse after Germany looked to shot down the good news. The USD fell to the CAD and was as knocked to a stronger Yen, the USDJPY closed 76 pips lower. Selling has continued this morning, the U/J is another 30 pips lower.
Risk majors all closed sharply lower to the Yen last night and have continued south this morning. The AUDJPY 87 pips lower from yesterday morning’s open, back trading below the 80. Handle! After the carnage Cryptocurrencies saw, Bitcoin has started to form a low from 6400. This level is basic and still need confirmation.
Tonight traders will be looking to U.S. employment which will be released at 10:30 AEST. The market is expecting a rise in the NFP figure, a drop in average earnings and a drop in unemployment. Markets can be quieter leading up to the release and very volatile post-release if there are misses to what’s been forecast. Please watch your risk management around the release if you’re trading this data or holding positions though it.
Good Trading from Eightcap
Sources; CNBC – All times are AEST
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