News & Analysis

US shares rebound; Oil touches 10 weeks lows; AUD jumps to USD & Yen; Aussie CPI and BOJ Policy meeting in today’s session

Oct 30, 2018 | Market Updates

Upcoming high impact news:

11:30 AUD CPI – Trimmed Mean CPI
BOJ news to be released throughout the Asian session
Monetary Policy Statement – BOJ Outlook Report – BOJ Press Conference
23:30 CAD GDP
04:15 CHF SNB Chairman Jordan Speaks
07:15 CAD BOC Gov Poloz Speaks

U.S markets held their rebound to close higher overnight. During the Asian session, futures jumped after positive comment from President Trump regarding trade talks with China. The Dow Jones closed 431 higher, the S&P500 added 41 and the Nasdaq gained 111. Earnings where mixed but leaned to the positive adding confidence to buyers.

“Obviously we’re in a correction phase of the stock market and I think investors have to realize that,” said Bruce Bittles, chief investment strategist at Baird. “The monetary environment has changed. As you can see, even with a 10 percent change in the stock markets, interest rates have barely moved lower.” “Typically bull markets are global in scope and the question was: would we follow the rest of the world, or would they follow us? I think we’ve found the answer,” Bittles added.

US Consumer confidence surprised, rising to 137.9 this month, driven primarily by the labour market and expectations that economic growth will remain solid in the near term. The Conference Board’s latest reading is the highest level since September 2000; economists polled by Reuters had expected the index to slip to 136.

Shares in Europe finished mixed, the DAX closed 48 pts lower while the FTSE gained 9.53 pts. Investors digested a flurry of earnings results while focused on global trade tensions. BP shares rose after the British oil giant reported profits more than doubled in the three months through to Sept 30. Apple announced a new iPad and MacBook Air at an event in the United States. Eurostat, said Tuesday economic growth in the bloc slowed to 0.2 percent in the third quarter, after a 0.4 percent expansion in the second quarter. Year-on-year eurozone growth slowed to 1.7 percent from 2.2 percent in the second quarter. Economists polled by Reuters had projected a 0.4 percent quarterly expansion and a 1.8 percent year-on-year rise. CNBC

Oil declined hitting 10 week low’s on Tuesday, global trade and growth worries hitting demand. International Energy Agency chief Fatih Birol says fuel demand could take a hit. USOUSD gave up a 66 rally to close 33 cents lower. At session low’s was 129 cents lower. We’re watching the 66 area from the 4H chart as it continues to show support.

Gold lost a further 6.60 overnight, taking this weeks decline to 11.40. Higher stocks and a stronger USD kept selling pressure on the yellow metal. The USD mainly gained to the majors, The EUR and GBP declined, the AUD held Asian session gains after positive trade comments. The JPY was hit losing ground as risk saw positive developments as US-China trade talks look to be more productive turn. The USD jumped to the Yen adding over 60 pips. Better than expected US consumer confidence added to the rally. The GBP closed flat to the Yen while the other majors all gained, the AUD standing out jumping by 112 pips closing back above the 80 handle.

The AUD could be in for further gains if this morning’s CPI comes in higher than expected. The markets is looking for 0.5% an increase over the last figure of 0.4%. Heavy BOJ news day coming up. Bank of Japan monetary policy meeting due on Wednesday. With inflation distant from its 2 percent target, the BOJ is set to maintain its massive stimulus program and refrain from making any big change to its policy framework for the time being. CNBC

The ASX200 has started Wednesday in the positive, currently trading 9.70 higher after yesterday’s surge.

Good Trading from Eightcap

Sources; CNBC – All times are AEDT

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