News & Analysis
Equity markets continue south – DAX dumped -1.59%; USDCAD surges +127 pips; Gold Groundhog Day, new 1314 bounce; Yen fights back to majors
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▸13:00 CNY Industrial Production
▸19:00 EUR ECB President Draghi Speaks
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▸01:30 OIL Crude Oil Inventories
▸08:45 NZD GDP
US markets – fell on Tuesday, the NASDAQ snapping a seven-day winning streak to close 77.31 points lower. The Dow Jones lost 171.58 and the S&P500 closed 17.71 lower. President Trump blocked Broadcom’s proposed buyout of Qualcomm, citing concerns based on national security. Both companies have been ordered to abandon the deal immediately. Qualcomm was the worst-performing stock in the S&P 500, falling 5 percent. Earlier on Tuesday, Trump ousted Secretary of State Rex Tillerson. The Washington Post first reported that Tillerson was out before Trump confirmed it in a tweet. Trump advised CIA Director Mike Pompeo would take over as secretary of state. CPI and Core CPI data came in as expected at 0.2%. Looking at the US30 daily chart the lower high we discussed yesterday is starting to confirm. The next lower test for sellers will be the 24,800 level.
Oil – fell further overnight losing another 47 cents after trading as high as $61.93 before the US session. Sellers traded down to $60.26 before buyers stepped in. Price remains range bound inside Friday’s rally. From the daily chart, oil remains a wait due to this. A government forecast on Monday showed U.S. shale oil output is expected to rise to a record 6.95 million barrels per day in April. Early tomorrow morning the EIA inventories report will be released. Traders will be waiting on this to see if the shale production is increasing US stockpiles.
European markets – fell on Tuesday, the DAX seeing the heaviest loses losing 197.36 pts. The FTSE fell be 75.98 pts and the CAC lost 33.92. E.ON jumped almost 4 percent by the close after the company said it would submit a 5.2 billion euro ($6.4 billion) voluntary takeover offer for minority shareholders in Innogy in the second quarter of 2018. France’s Iliad slumped to the bottom of the index losing 10 percent. The GER30 lost over 250 pts and has returned to 12,120 which is the first low set in the correction. The possible next step is a test of the lower low set in March if buyers are unable to find support.
Forex – what a night! The JPY looked like toast as we moved through the London session. The majors all making very strong gains. The EUR and GBP hit centuries. The NY session produced a strong reversal that set all off their highs. The AUDJPY being the hardest hit as retraced its entire 77 pip move. The UK budget release spurred the GBP higher as it added 54 pips to the USD and 79 pips to the JPY. ECBs Lane commented that there’s no concern about the EURs current level. This gave the EUR a good boost as it gained to the USD, JPY and AUD. The EURUSD finished 56 pips higher. US CPI data hitting 0.2% combined with BoC Poloz’s comments drove the USDCAD 125 pips higher. Price sitting back close to this month’s highs. Whether it can break out and make new monthly highs is another thing altogether, a break above 1.2986 is a good start to suggest the uptrend has further to go.
Gold – groundhog day best describes it. The last three days have been basically a repeat. I say basically as we did make a new weekly high last night. Price has been sent lower for three sessions now only to fight back from the 1314 area. Now we have closed above 1325.20 will we finally see some buyer follow through?
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
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