News & Analysis
US stocks snap losing streaks; USD knocks Gold and risk lower; Oil stumbles at 72.50
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18:30 GBP Current Account
22:30 CAD GDP
U.S markets snapped loses overnight, the S&P500 breaking a 4-day losing streak adding 8.03 points. The Dow broke a 3-day losing streak closing 54 pts higher. Tech stocks gained led by Apple and Amazon, Facebook, Alphabet and Twitter also closed higher, lifting the broader tech space and the overall equity market.
Stocks in Europe closed higher, the DAX +49.70 – the FTSE +33.95, traders monitored Italy, amid worries over the country’s budget and deficit targets for next year. Brexit – Chancellor of the Exchequer Philip Hammond tweeted on Wednesday that the autumn budget statement would be presented earlier than usual, on October 29, ahead of a vital Brexit summit scheduled in November.
“This is a case of the strong leading the market again,” said Marc Chaikin, CEO of Chaikin Analytics. “Heading into year-end, the stocks that initially led us higher earlier in the year will be the ones to do so once again.”
U.S Core Durable Goods Orders fell below expectations hitting 0.1% and U.S GDP met expectations at 4.2%, this didn’t deter USD strength as rallied during the Euro and London sessions. The USD found further strength after the Federal Reserve’s outlook for more rate hikes beyond this year as well as a weakening of the euro on worries about the Italian budget.”The Fed is moving faster than most central banks and that’s dollar-supportive,” said Erik Nelson, currency strategist, at Wells Fargo Securities in New York. “The Fed removed ‘accommodative’ in its statement and people are saying that we are moving closer to neutral. That will be eventually become a factor supporting foreign currencies against the dollar. But I am not sure we’re there yet.”
The Dollar had a solid session to the majors, the EUR lost 96 pips – the AUD lost 49 pips and the GBP fell by 88 pips. The USD gained to the Yen adding 63 pips which also saw a new monthly high and a new 2-month high. Price is sitting around 113.45 set back in January. The Yen pushed risk lower into the London session before a fightback. The GBP pared 66 pips but closed 15 pips lower.
Gold lost over $11 due to USD strength, price breaking through weekly support and breaking out of its wedge/triangle pattern. Oil tested 72.50 but failed to break through, price settled 18 cents higher. 72.40 is seen as key resistance on the 4-hour chart.
Bitcoin had a solid day adding 190 USD, price sitting around 6700 high. This morning leads look positive for the ASX200, risk is slightly lower to the USD and Japanese Yen at this point in the Asian session.
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Sources; CNBC – All times are AEST
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