News & Analysis
Dow Jumps 255 points – Tax Reform edges closer; GBP volatile trade; EUR declines
Today’s high impact news:
▸ OPEC Meetings all day
▸ 00:30 USD Prelim GDP
▸ 01:00 GBP BOE Gov Carney Speaks
▸ 02:00 USD Fed Chair Yellen Testifies
▸ 02:30 Crude Oil Inventories
US stocks surged to new records overnight as the Senate Budget Committee approved the Senate’s tax plan on Tuesday, bringing the upper chamber closer to a floor vote. The Dow Jones closed 255.93 higher, the S&P500 closed 25.62 points higher. The major indexes briefly pared gains after North Korea fired a missile that landed in the waters off the coast of Japan. Tuesday marked the first time since mid-September that North Korea launched a missile. European stocks turned positive earlier in the night, UK stress test results came in positive. The Bank of England’s stress tests revealed that no banks need to raise extra capital for the first time since the tests started in 2014. The FTSE closed 76.75 higher is a very strong session. The DAX gained 59.33 points.
The dollar rose against a basket of currencies on Tuesday, rebounding from a two-month low hit the previous day, as risk sentiment improved and the confirmation hearing of new Federal Reserve chair Jerome Powell kicked off. The USDJPY held 111.04 support and closed 39 pips higher. USDCAD hit 5-day highs adding 47 pips. The EUR traded lower to most majors, EURUSD traded 60 pips lower. The GBP had a wild night, as Brexit-related doubts began to re-exert their grip on the currency. A deal on the Northern Ireland-Irish border, a key part of Brexit talks, has become trickier as the Irish government has been pushed to the brink of collapse. The GBPUSD traded in a 167 pip range, at one point tested 1.3220 to the downside.
OPEC meeting is held today, they run for the entire day. The market is awaiting details about an extension to OPEC-led production cuts that have boosted prices. Delegates recommend reviewing the deal in June, which would be perceived as a shorter extension of cuts than expected. Oil traded slightly lower overnight. We expect quite trade until details emerge.
US30 – put on a solid show last night, flying through 23,595 resistance and making a new breakout into fresh all-time highs.
GBPJPY – saw volatile trade overnight. Price ran a 232 pip range. Price has continued to rally this morning, we’re waiting to see the reaction from 149.37 resistance if it’s reached.
Good trading from Eightcap.
Sources; Reuters, CNBC
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