News & Analysis

Equity Markets – U.S hits new records – Europe mixed – FTSE new records; EURUSD surges – AUDUSD closes in on 79 cents.

Jan 12, 2018 | Daily Market Outlook

Today’s high impact news:

Ôû©00:30 USD CPI – Core CPI
Ôû©00:30 USD Retail Sales – Core Retail Sales

U.S markets – roared back to life overnight, all main three indexes making new record highs. The Dow Jones added 205.60 points, the S&P500 added 19.33 points and the NASDAQ jumped by 58.21 to close at 7211.78. Yesterday’s rumor that China may end treasury buying was denied by sources inside China. Delta Air Lines reported adjusted earnings that surpassed analyst expectations, sending the company’s stock 4.8 percent higher. Homebuilder KB Home also posted a better-than-expected quarterly profit; the stock rose 12.3 percent. BlackRock, J.P. Morgan Chase and Wells Fargo are all scheduled to report Friday. Earnings are expected to have grown by 10.6 percent during the fourth quarter, according to S&P Capital IQ. On the data front, last night’s PPI failed to meet 0.2% expectations coming in at 0.1%. Tonight CPI and Retails sales data will be released. Oil broke higher in last night’s LON session hitting $64.55. Sellers trimmed gains and price settled at $63.27. Keep an eye on this traders as we may have a failed high/break developing. European markets – Finished mixed on Thursday falls on the DAX -78.44 points, CAC -16.13 but the FTSE pared earlier losses to hit new records, closing 14.43 points higher. U.K. retailer Marks and Spencer dropped in afternoon trade to finish Thursday over 7 percent lower, while Britain’s biggest retailer Tesco was down 4.5 percent. Shares of Pandora fell by more than 11 percent after the Danish jewellery maker said it anticipated profit margins to decline over the next few years.

Forex – Concerns China could be slowing its U.S. debt buying ease, failed to get the USD going it did make a comeback of sorts adding 45 pips to the Yen but that was basically it. We saw some strong gains to the USD overnight. The Yen fought back and the USDJPY closed 19pips lower. The EURUSD charged back above 1.20 closing 87 pips higher, buyers are back at it this morning with a further 29 pip gain. The GBP rallied to the USD and JPY. The Cable added 33 pips after making a failed low. Price is rallying this morning, 24 pips higher and we could see a test of 1.3570 range top if momentum continues. The AUDUSD came back to life as Australian retail sales data smashed expectations. This set the tone for the Aussie as it traded higher all session. Price closed 51 pips higher at a new weekly high. Price continuing higher this morning we think buyers will try a test of .7900. Gold recovered yesterday adding $5.30. Buyers have beaten 1322.47 closing high this morning. A trend continuation looks to be trying to confirm. We would like to see price close above 1326 to give this merit.

EURUSD – surged back into the black last night. Buyers are approaching strong resistance seen from 1.2066 – 1.2080. This zone has stopped three previous breakout attempts.

Good trading from Eightcap.

Sources; CNBC. All times are AEDST

 

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