News & Analysis
Equity Markets continue to rally – Dow adds 200 points; NFP misses 190K – USDCAD new 2018 lows; EURUSD – resistance continues from 1.2070
Today’s high impact news:
▸02:30 CAD BOC Business Outlook Survey
U.S markets – rallied on Friday despite US non-farm pay role data coming in under expectations. The Dow Jones has made its best start to a year since 2006 closing 220.74 points higher. The S&P500 gained 19.16 points and the NASDAQ closed 58.64 points higher. The Dow and NASDAQ enjoyed their best start to a year since 2006, notching their biggest four-day gain to kick off a year since then. “Valuations long term are stretched but people are looking past that because of the tax cuts,” said John Serrapere, director of research at Arrow Funds. President Donald Trump signed a bill last month that slashed the corporate tax rate to 21 percent from 35 percent. The U.S. economy added 148,000 jobs in December, according to the Labour Department. Economists polled by Reuters expected a gain of 190,000. “I think the net-net effect in the market is neutral,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab. “Yes, the numbers were a bit disappointing, but not so much that they change Fed policy, for example.” “December and January are also notorious months for being off the mark,” Frederick said. Friday showed traders were impressed by the jobs created despite not reaching the amount expected. European markets – continued higher on Friday as momentum was fed from a positive US lead. Strong sessions were seen on the DAX as it closed 151.75 pts higher, the FTSE closed 28.34 pts higher and the CAC added 57.06. The FTSE closed at new record levels. The GER30 CFD that tracks the DAX closed above 13310, this morning buyers have moved above the 13345 level. Price is trading at its highest level since November 2017.
Forex – the USD had a mixed session on Friday, the NFP missed but average earnings meet expectations. Canadian employment data beat expectations driving the USDCAD to new 2018 lows. Sellers reached 1.2353 at one stage. Price settled 76 pips lower. The EURUSD was pushed lower as where other EUR crosses in what was generally a weaker night for the EUR. The EURUSD is struggling to move above 1.2070 atm this area is a short-term high. The GBP closed higher to the USD. The AUDUSD fought back from negative territory to finish flat at .7860. The JPY continued to weaken on Friday, the majors closed higher to it. The USDJPY finished off highs with a gain of 28 pips. This morning the JPY has weakened further with the AUD, EUR, USD and GBP all starting Monday stronger. The GBPJPY has tested 153.65 its 2018 high. Gold took a breather on Friday losing just over $3, resistance looks to have developed from 1322.20, for now, this looks to be a short-term high. Sellers have been active this morning price is trading slightly in the red. Oil closed 25 cents lower on Friday, but buyers did emerge once $61 was reached. If $61.80 can continue to hold as resistance we’re looking for further downside.
US30 – has added 620 points since it opened on the 2nd of January. 1115 points have been added since December 1st. Incredible numbers there, with volatility so low you have to think how long can this last?
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
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