News & Analysis
Global stocks fire – Tax reform drives buyers – AUS200 new 2017 highs; USD stalls – Gold beats 1260.60
Today’s high impact news:
- 00:30 USD Building Permits
U.S stocks jumped for a 2nd day as Tax reform continues to be the leading factor in equity markets. New records we’re seen, on the Dow Jones as it closed points higher, on the S&P500 closing 14.35 points higher and on the NASDAQ as it closed 58.18 points higher. The Dow posted its 70th record close of the year. Congress is expected to vote as early as Tuesday on a plan that would slash the federal corporate tax rate to 21 percent from 35 percent. News of several corporate deals also lifted sentiment on Wall Street.
European equity markets moved higher on Monday driven by U.S tax reform and news France’s Thales announced it had agreed to buy Gemalto for around 4.8 billion euros. The DAX surged adding 208.74 points, the FTSE added 46.44 and the CAC surged closing 71.28 points higher. The AUS200 (ASX200) hit new 2017 highs overnight touching 6070. The mood is fever pitch for global stocks markets at the moment. With so much riding on the U.S tax reform any miss or policy fail could see a fast reversal, odds are low that could happen but, if it does buyers will most likely need a fast exit plan!
The USD traded mixed overnight and at one point looked like it was on the rebound after a lower to flat day. The USDCAD threatened mid-London session to confirm a trend continuation but current resistance proved too much and price flattened. On the flip side of surging equity markets, the USD stall last night was due to tax reform worries. Risk assets finished higher, the AUD, EUR, and GBP all finished higher to the USD. Early in the LON session, Eurozone annual inflation came in higher by 1.5% a rallying EUR furthered gains after this news making strong gains to the USD, JPY, AUD and NZD, gains were trimmed in NY session. Gold added $7 overnight in a strong session closing above 1260.60 level. 1266 the next resistance level for buyers to test.
This morning the ASX200 is trading higher up 24.90 points. The USD is slightly firmer to the EUR and AUD. The JPY continues to trade softer to the AUD, while the EUR and GBP are flat.
EURUSD – looks trapped at the present. Lasts nights rally was cut short once price hit 1.1835. Overall, price remains in a downtrend but buyers have set up a base with a higher low from 1.1733. This level needs to hold for buyers or a trend continuation lower maybe building.
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
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