News & Analysis

Dow’s Fresh Records; FOMC Minutes; Nikkei at Two Decades’ Highs

Oct 12, 2017 | Daily Market Outlook

Key data releases for today:

  23:30 AEDT – USD – PPI; Unemployment Claims

US stocks rallied again overnight with Dow hitting new highs; DJIA finished 42.41 higher at 22,872.89; S&P500 added 4.60; NASDAQ added 16.30.

European markets finished mixed with DAX at +21.43; FTSE slightly lower losing 4.63 points.

FOMC minutes have all but penciled in a DEC rate hike (consider this priced in by the market now). A hold in December will be unexpected. President Trump tweeted about the stock market overnight, saying it would grow ‘by leaps and bounds’ if tax reform were accomplished. The USD index hit a two week low as FOMC minutes showed inflation concerns. One of the key concerns are fading hope for Trump’s tax plan. Gold and Euro were given a boost by USD weakness overnight – gold recovered to finish $3.20 higher while the EURUSD added 51 pips to finish above 1.1830.

Nikkei has been under the radar and after a soft start it reversed to finish 57.76 higher, at 20,881.27 – a two decades high.

As for the Catalan, Spain’s Prime minister has given the Catalan government eight days to drop its independence bid.

Data has been light so far this week but it picks up from tonight finishing with US retail sales and CPI on Friday. This morning we saw USD under pressure, AUDUSD higher, Japanese Yen mixed and AUD higher while USD flat. ASX200 has also edged higher after a soft start to the session.

USDCAD – extended loses as the USD continued to slide. Price lost 65 pips yesterday with potential support level below at 1.2441.

US30 – after a light test lower, buying resumed breaking to new highs. Divergence still present with a tight ending diagonal. Buying is currently feverish so traders need to wait for strong confirmation before thinking short.

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