News & Analysis

Fed holds rates – leaves Dec open for increase; DAX jumps 1.8%; USD recovers late session

Nov 2, 2017 | Daily Market Outlook

Today’s high impact news:

20:30 GBP Construction PMI

23:00 GBP BOE Inflation Report – MPC Official Bank Rate Votes – Monetary Policy Summary – Official Bank Rate

23:30 USD Unemployment Claims

DOW and S&P500 increased on Wednesday, Dow futures were up by 130 points at one stage in pre-market. Indices did hit new highs at one stage but retreated later in the session. (see figures listed below):

  • Dow Jones +57.77
  • S&P500 +4.10
  • NASDAQ -11.14

In a busy night data wise, we had a mixed bag as ADP Non-farm employment came in better than expected at 235K, while the ISM Manufacturing PMI missed expectations coming in at 58.7. The Fed held rates as expected and the door still looks open for a  December hike at this stage. The USD entered LON weaker as the AUD and EUR made gains. Gold picked up in the LON session but retreated in the NY session after hitting 1280.80. US crude inventories came in at -2.4M, oil retreated from highs overnight finishing 36 cents lower, after touching $55.29. UK manufacturing gave the market surprise beating expectations to come in at 56.3. The GBP rallied to the news but fell away to the USD. The GBPUSD finished the day 40 pips lower.

In Europe the DAX came back online with a bang overnight, rallying 235.94 points. Volkswagen topped the bourse, with its stock hitting pre-emissions scandal levels for the first time, closing up 4.8 percent after a price upgrade and upbeat sales data.  The FTSE finished slightly lower by 5.12 points, British retailer, Next, tumbled to the bottom of the European benchmark, closing down over 9 percent after announcing that trading remained “extremely volatile”

The heavy news week continues with the Bank of England tonight. at this point traders are looking for a rate rise from 0.25 -0.50 percent. If we see a hold than we can expect fireworks from the GBP.

GER30  – Resumed the trading week with a massive rally, trading close to 13,500.

Good trading from Eightcap.

Sources Reuters, CNBC

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