News & Analysis

Dow Jones new highs after wild trade; Powell Nominated for Fed Chair; BoE increases rates – GBP trashed; NFP caps off a busy week in data.

Nov 3, 2017 | Daily Market Outlook

Today’s high impact news:

Bank Holiday – Japan

20:30 GBP Services PMI

23:30 CAD Employment Change – Unemployment Rate – Trade Balance

23:30 USD Average Hourly Earnings – Non-Farm Employment Change – Unemployment Rate

01:00 USD ISM Non-Manufacturing PMI

The Dow Jones and GBPUSD had wild sessions overnight. The Dow traded in a 178 point range to finish higher by 81.25 points at new highs. While the GBPUSD set a 176 pip range in a single 5-minute candle to close 186 pips lower, returning to September levels. Super Thursday delivered plenty of volatility.

In the US, President Trump has nominated Jerome Powell to replace Janet Yellen as Fed  Chair. Thumps tax reform has been released, some key points;

  • The tax plan would cut mortgage interest deductions in half. However, it would keep retirement savings plans like the popular 401(k) intact.
  • The plan would permanently lower the corporate tax rate to 20 percent.

The USD retreated settling lower to the CAD, CHF and JPY. Gold, AUD and EUR made gains to the USD. Trade was hesitant overnight, Gold and the EURUSD finishing off highs. Unemployment claims came in better than expected at 229K but it failed to settle the USD. Employment continues to strengthen in the US, will we see the trend continue in tonight’s US employment data main event?

In Europe, the Bank of England raised rates to .50% from .25% their first increase in a decade. The GBP was totally trashed. The GBPUSD lost 125 pips on release. The GBPJPY lost 130 pips.  This was a wild reaction to a priced in rate rise. European stocks finished mixed, the FTSE added 67.36 spurred by the Bank of England. The DAX finished 24.58 points lower.

US and Canadian Employment data caps off what has been a big week. Based on latest US employment data you would think we may see positive data come out tonight, time will tell.

GBPUSD  – Carnage for the Sterling post rate rise.

US30 – Had a wild session overnight but managed to close at new highs.

Good trading from Eightcap.

Sources Reuters, CNBC

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