News & Analysis
Equity Markets –Europe ends in the end; AUDUSD above .7950; USDJPY 3-month lows; Gold stalled after 1344 test
Today’s high impact news:
▸20:30 GBP CPI
▸04:00 CHF SNB Chairman Jordan Speaks
U.S markets – observed Martin Luther King Day on Monday. Oil continued higher overnight adding 32 cents. Price broke last Thursdays $64.53 high. This morning buyers have opened higher at $64.68, sellers in control with small loses. Oil markets have been well supported by production cuts led by OPEC and Russia which are aimed at propping up crude prices. European markets – traded lower on Monday, the FTSE lost 9.50 points, the DAX lost 44.52 points and the CAC closed 7.37 points lower. Trade was lighter due to the U.S markets closing for Martin Luther King Day. U.K. construction firm Carillion had entered into liquidation. The company’s shares were suspended from trading, but its rivals rose on the news, with Serco up over 7 percent and Interserve rising 2 percent. Finnish miner Metso dropped to the bottom of the European benchmark, tumbling 9.84 percent after the firm reported lower-than-expected sales and profits. Over the weekend, news emerged that BNP Paribas was making plans to benefit from the U.K.’s decision to leave the European Union. The French bank has prepared plans to attract mid-sized British companies, the Financial Times reported.
Forex – The dollar languished at three-year lows against a basket of currencies on Monday, while the euro stood tall on investors’ hopes that European Central Bank policymakers could be poised to further trim their monetary stimulus. Bank of Japan Governor Haruhiko Kuroda reiterated the central bank’s resolve to maintain its massive stimulus program until 2 percent inflation is achieved stability, he also said the country’s economy was expected to continue moderately expanding. Core consumer prices are rising around 1 percent, Kuroda said in a speech to BOJ regional branch managers. This was a slight change from his previous speech to branch managers when he said core consumer prices were around zero. The EUR, GBP and AUD continued their drive to the USD. The AUDUSD added a further 60 pips yesterday. The USDJPY lost 55 pips dropping to 110.30 on it low, 15th September levels. Once the USDCAD broke 1.2432 things looked ominous, sellers tested 1.2400 low area when buyers returned trimming 25 pips in loses. We’re watching this low as it’s the 2nd time it’s rejected, sellers. Gold trimmed gains after hitting 1344.63. Price closed $4.20 higher but traders should watch today’s action. We were looking at 1350 as a possible high, from 1345 to 1350 there are supply points. With signs, the USD might be overdone on the short-term we could see a pullback in Gold and other XXX/USD pairs.
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
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