News & Analysis

U.S stocks flat; Oil enters bear market levels losing 21%; USD lifts after Fed signals further rate rises

Nov 8, 2018 | Market Updates

Upcoming high impact news:

11:30 AUD RBA Monetary Policy Statement
20:30 GBP – GDP – Pre-Lim GDP – Manufacturing Production
00:30 USD PPI

Mixed session overnight for U.S stocks, the Dow Jones added 10.92while the S&P500 lost 7.06 and the Nasdaq dropped 39 points. The SP500 snapped a 3-day winning streak after the Federal Reserve statement. The central bank said in a statement it expects “further gradual increases” in the overnight rate.

The Fed has hiked rates three times this year and is forecast to raise them once more before year-end. “Our guess is the Fed’s going to be gradual. They don’t want to force the issue,” said Tim Courtney, chief investment officer at Exencial Wealth Advisors. “They definitely don’t want to be the ones to invert the yield curve.”  Post-mid-terms trader sentiment remains high and some analysts are looking for further gains to the end of 2018.

Oil once again gave up London session gains to move lower during the NY session, price entered bear market territory hitting 60.67 a loss of 21% from its 52 week high. Signs of growing supply even as data showed record Chinese oil imports is worrying traders.

This week U.S production hit a record high at 11 million bpd, the other top producers, Saudi Arabia and Russia, have been dialling up production since June. “All three of them are continuing to pump at record levels, that’s been … part of what’s causing oil to move into a bear market,” Tamar Essner, director of energy and utilities at Nasdaq Corporate Solutions, told CNBC’s “Worldwide Exchange” on Thursday. “I think the market is grappling with some fundamental uncertainties,” she said. “We don’t know if we are oversupplied or undersupplied.” – CNBC

The USD gained after the FOMC, risk currencies moved lower after a mainly stronger week. The AUDUSD closed 64 pips lower the GBPUSD lost 67 pips. The majors were mixed to the Yen, the AUD continued to gain while the EUR finished slightly lower and the GBP ended Thursday flat. The USD had a strong session to the Yen jumping by 57 pips moving back in the 114 handle. Gold closed lower for the 5th straight session losing 2.70. Equity markets where weaker but a stronger USD maintained selling pressure. 

Local shares are slightly lower down 6 points. Sterling traders will now be moving focus to tonight’s GDP and prelim GDP data at 8:30 pm. It’s a busy slot as manufacturing production data will also be released at the same time.

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.