News & Analysis
Boeing Trade Worries drags Dow Lower – Japanese Yen returns knocking majors; USDCAD continues 1.2985 stall; Bitcoin dips below 8K
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US markets – continued their decline last night, China trade war fears hit Boeing dragging on the Dow Jones. The DJA closed 248.91 pts lower Boeing losing more than two percent, contributing most to the DOWs fall. The S&P500 closed 15.83 pts lower and the NASDAQ fell by 14.20 pts. Key data came in mixed, PPI beating expectation but Retail Sales missed expectations. This volatility is the norm not the exception now,” said Art Hogan, chief market strategist at B. Riley FBR. “It’s the perception of what tariffs mean … right now we’re focused on significant tariffs on Chinese goods.” Traders, looking at the daily US30 chart we’re seeing price sitting at a potential short-term demand area at 24,700. We’re waiting for further confirmation, a break of that level could set up a move to test 24,540.
Oil – traded in a choppy session overnight settling close to 15 cents higher. Price was far from flat during the US session, sellers testing 68 cents lower and earlier buyers tested 35 pts higher. This morning’s inventories report; U.S. crude stocks rose by 5 million barrels, the biggest jump since late January, the U.S. Energy Information Administration (EIA) said. Expectations had been for a 2 million barrel buildup. The effect was offset somewhat by a larger-than-expected draw on fuel stocks. This data sent traders into a stalemate as reflected in last night price action. While price continues to trade range bound in last Friday’s candle we think traders should give this market time to find direction.
European markets – traded mixed on Wednesday, the FTSE lost 6.09, the DAX edged 16.71 pts higher and the CAC closed 9.43 lower. Global uncertainty driven by Trump’s tariffs continue to weigh. Basic resources maintained its gains, finishing the day up almost 1 percent, on the back of strong industrial production data in China. A number of London-listed miners consequently rose, with Antofagasta, Glencore and Anglo American all closing up 1.8 percent or more. Bpost tumbled to the bottom of the European benchmark, down 22 percent after its fourth-quarter results missed expectations.
Forex – another night of Japanese Yen kick back! Only a few days ago the majors looked set to make a comeback to the JPY things have certainly changed, majors ending lower to JPY last night selling continuing this morning. The EUR faulted last night losing ground to the USD and on most crosses. The USD worked with mixed data in last night’s US session. The AUD closed higher as did the NZD, but the GBP finished flat. This morning has been mixed with the GBP and EUR edging higher. The USDCAD continues to struggle at the 1.2985 level. Buyers fought back from a seller test but have had real trouble mustering the momentum to rechallenge the supply area from 1.2965 – 1.2990. We think buyers will need some solid strength to beat this area. Sellers should also be wary as this may also be a consolidation.
Gold treaded water in last night’s session, buyers made a rejected move and sellers were rejected once they tested the previous opening price level. This morning Gold is trading $2.45 higher but the acid test remains for buyers at around the 1328 area. Bitcoin continues to have to deal with knock after knock. The latest negative news being Google announced that they will ban all cryptocurrency advertising. Bitcoins price fell by 795 yesterday. Sellers dipped below 8K, price is trading slightly lower this morning.
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
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