News & Analysis
Equity Markets – Dow touches 26K – Gov shut down looms – Europe mixed ; Gold – EURUSD pare loses; Bitcoin hammered
Today’s high impact news:
▸2:00 CAD BOC Monetary Policy Report – BOC Rate Statement – Overnight Rate
▸3:15 CAD BOC Press Conference
U.S markets – pulled back from record highs on Tuesday as a looming government shut down worried investor sentiment. The Dow Jones traded 15 points higher but below 26,000, a milestone reached earlier in the session after trading 283 points higher. The S&P500 traded above 2800 for the first time before pulling back and settling 9.82 lower. The NASDAQ closed 37.38 pts lower. Congress needs to pass a spending bill by the end of Friday to avoid a government shutdown. A point of contention between Republicans and Democrats is an immigration bill which Democrats want to pass. Those talks have complicated efforts to keep the government open. Historically, stocks have struggled immediately after a government shutdown. The Cboe Volatility index, which is considered to be the best gauge of fear in the market, rose 18.3 percent to 12.02. Oil lost 101 cents overnight, closing back below $64 a barrel. Bitcoin’s woes continued yesterday as the cryptocurrency plummeted back below 11K this morning. This is the 2md time in 4-weeks price has returned to the 10,xxx area. Price has just moved below its 17/12 low. A loss of 8,617 in value since its record high. European markets – traded mixed, the FTSE ended lower by 13.21 points while the DAX closed 45.82 points higher. U.K. inflation eased off its post-Brexit vote high in December. European industries, commodities were under the greatest pressure Tuesday. Oil stocks fell 0.92 percent as a sector, on the back of weakness seen in crude prices. Despite Brent crude falling over 1 percent, prices continued to hover around $69.35 at Europe’s close, a level not seen since 2014. U.S. crude traded just below the $64 per barrel mark. London-listed miners BHP Billiton, Anglo American and Antofagasta all tumbled 1.5 percent or more, amid a slump in metals prices — particularly copper and nickel.
Forex – choppy night, USD made gains to the EUR and AUD but failed to hold gains. We saw fightbacks from the AUDUSD and EURUSD late in the New York session. UK CPI meet 3% expectations and failed to support the GBPUSD as it traded 53 pips lower into the London session. Like the EUR it recovered into the NY session. USDJPY traded lower for a 7th straight day, making a new lower low for the week. USDCAD retested 1.2400, buyers look active from this point but confirmation of a low is still required. Choppy trade for the AUDJPY, EURJPY and GBPJPY, all three made tests higher and lower. 88.15 continues to show resistance on the AUDJPY daily chart. Gold fell overnight closing $1.60 lower after trading as low as 1331. Buyers emerged as the USD weakened. We’re watching 1339 on the 4H chart as it may become resistance.
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
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