News & Analysis

U.S stocks jump after mid-terms – Oil hits 8 month low after inventories; FOMC in focus

Nov 8, 2018 | Market Updates

Upcoming high impact news:

06:00 USD FOMC StatementFederal Funds Rate EXP hold at 2.25%

Stong session for U.S stocks as buyers jumped back in after the Mid-term results, the Democrats now have control of the House and the Republicans increased their stance in the Senate. Buyer confidence was boosted, key indexes all making strong gains. The Dow Jones added 545, the S&P500 added 58.44 and the NASDAQ surged by 194 pts. The US30 CFD has now retraced more than 61.8% of the current correction.

“We believe (out of consensus) that a split Congress is the best outcome for the US and global equity markets,” said Marko Kolanovic, a widely followed quantitative analyst at J.P. Morgan, in a note. “As the President cannot count on Congress or the Fed for more easing, he will need to do what is in his power to keep the economy rolling – drop the damaging trade war and turn it into a winning deal.” Stocks rallied across multiple sectors, as shares of Caterpillar, Goldman Sachs, Amazon and Alphabet all rose. Caterpillar is seen getting a boost from continued economic growth. – CNBC

Oil looked like it was going to snap its down streak going into the NY session. Buyers fled once US stockpiles numbers hit the market sending price to close lower for the 8th day in a row. USOUSD dropped its 148 cent rally to close 17 cents lower. U.S. crude inventories rose by 5.8 million barrels in the week to Nov. 2, while the nation’s oil production hit a record 11.6 million barrels a day, government data showed. Russia and Saudi Arabia are discussing oil output cuts in 2019, Russia’s TASS news agency reported.

The USD made a late comeback, risk spent most of the LON and NY session higher, the AUDUSD gained 31 pips. The EURUSD cut 74 pips settling at breakeven. Risk continued higher to the JPY as traders moved out of the safe-haven. After a volatile day, the USDJPY closed 10 pips higher maintaining the current uptrend. The ASX200 is trading 31 points higher, with strong leads from the U.S. The AUS200 is back above 5900 in today’s trade. AUD traders will be watching the Chinese Trade Balance data which will be released during the Asian session, the market is looking for 209B.

Tomorrow morning traders will be looking to the FOMC for the rates statement, the federal funds rate is expected to be held at 2.25% and should be factored in at this point. Traders will be looking for hints for future direction of the Fed, this statement could be more important due to last weeks stronger than expected pay role figures.

Good Trading from Eightcap Sources; CNBC – All times are AEDT

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