News & Analysis
U.S stocks choppy; Oil crashes by 7% back in 2017 levels; risk majors rally to USD and Yen; Brexit deal getting closer
Upcoming high impact news:
11:30 AUD Wage Price Index
13:00 CNY Industrial Production – Fixed Asset Investment (Med Impact)
20:30 GBP CPI
00:30 USD CPI – Core CPI
U.S stocks finished mixed after heading into the U.S session with mixed leads. At a few points pre-open, the Dow futures hit triple figures. After Monday’s plunge nerves remained and leads where cut. The Dow finished the session 100 pts lower. Tech was Monday’s main mover, shares did rally during the session the Nasdaq hit a 1.6% gain before finishing flat +.01 higher. The S&P500 lost 4 pts. Trade was a key factor last night, Larry Kudlow confirmed reports of renewed talks between the U.S. and China. Energy was the worst-performing sector as crude prices fell to their lowest levels since 2017. The stock market still influenced by Apple, falling back into the red in the afternoon after Apple had moved lower.
“The overhanging issue in this market has been China, so any time you get positive news on that, it’s going to be good for stocks,” Schwab’s Frederick said.
Saudi Arabia’s Energy Minister Khalid al-Falih had said on Monday that OPEC agreed there was a need to cut oil supply next year by around 1 million barrels per day (bpd) from October levels. This gave Oil a boost but that was very short lived! Price posted their biggest fall of the year overnight tanking by 7%. President Trump urged OPEC and Saudi Arabia on Monday to reject another round of production cuts after oil prices collapsed over the last six weeks. USOUSD dropped 360 cents closing at 55.39. This is the lowest close of 2018 and extends the 2-month crash to $17.70
Gold stopped the bleeding overnight closing 1.58 higher after breaking into the red during the London session. A weaker USD supported buyers. The USD was weaker overnight as the AUD rallied on new US-China trade talks and the EUR and GBP rallied on Brexit deal hopes. The JPY also pulled back to risk but maintained strength to the USD. The USDJPY briefly broke above 114.00 before sellers knocked it back down to 113.79. The USDCAD held up well due to the oil plunge but remained under pressure due to a move back into risk currencies. The GBP EUR and AUD all made good gains to the safe havens and buying has continued this morning into the Asian session.
The ASX200 is trading light atm, down 8.50 points, AUD could see some movement if there are any big misses in the Wage Price Index that will be released at 11:30 this morning. Another to watch is tonight’s US CPI data coming out at 00:30.
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