News & Analysis

U.S Equities rise as markets look to midterm results, Oil drops back to April levels; Risk gains to USD & JPY – AUDUSD reclaims .72

Nov 7, 2018 | Market Updates

Upcoming high impact news:

13:00 NZD Inflation Expectations
07:00 NZD Official Cash Rate EXP 1.75% – RBNZ Monetary Policy Statement – RBNZ Rate Statement
08:00 NZD RBNZ Press Conference

U.S stocks closed higher overnight, the US30 at this point is pushing for a 2nd higher week in a row. The mid-term U.S elections the main focus in last nights session. The Dow Jones closed 173 pts higher, the S&P500 added 17.14 pts and the Nasdaq closed 47 pts higher.

Democrats are expected to take control of the House away from Republicans while the GOP maintains a slim majority in the Senate. Stocks have historically done well under a divided government. Since 1928, the S&P 500 has averaged an annual return of 12% when Congress is split and Republicans control the White House. But “this is a very different election and gridlock may not be good” for the market, said Gene Goldman, head of research at Cetera Investment Management. Goldman said the GOP-led government has implemented key policies that are helping the economy grow, and gridlock would slow down similar policies in the future.

With no key U.S data tonight or tomorrow, traders will move focus to Friday’s FOMC rate and statement.

Oil continues to set new monthly lows, the Trump administration on Monday reinstated sanctions on Iran’s energy, banking and shipping industries, however, Washington granted temporary waivers to eight countries, including China and India, the biggest purchasers of Iran’s oil. This failed to stop the rout, USOUSD lost 102 cents closing at 61.81. price has now dropped back to levels not seen since April this year.

The USD traded mainly lower overnight as risk gained through the U.S session. The EUR threatened a few times to move lower but buyer demand returned. The EURUSD closed 21 pips higher while the AUDUSD (+34) closed back above the .72 handle. Traders continue to return due to stable US-China trade news and a weaker USD. The GBPUSD continued its stronger week adding just under 60 pips.

Gold gave back 4.88 rally to end the session just over $5.00 lower. Equity strength offset demand as traders moved to buy due to midterms.

Risk moved higher to the Yen. The USD added 22 pips to the Yen and held 11 pips higher to the CAD. This morning the AUD is slightly lower to the Yen and USD while the EUR and GBP are higher. The NZDUSD jumped after positive employment data this morning. After yesterday’s strong session the ASX200 is currently 9 points lower.

Good Trading from Eightcap

Sources; CNBC – All times are AEDT

* 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.

 

 

 

 

 

HEAD OFFICE

Level 6, 360 Collins Street
Melbourne, VIC
3000 Australia

Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with EightCap, and seek independent advice if necessary. Forex and CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing substantially more than your initial investment). A Product Disclosure Statement (PDS) and a Financial Services Guide (FSG) for our products are available to download from our Legal Documentation page. You must assess and consider them carefully before making any decision about using our products or services.

EightCap is a registered business name of EightCap Pty Ltd (ABN 73 139 495 944). We are regulated by the Australian Securities & Investments Commission (ASIC) - our AFSL number is 391441. This licence authorises us to provide financial services to people in Australia.

The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.