News & Analysis
Markets fightback from Cohn shock – US hints Mexico Canada exemption – EU threatens US with tariffs; Bitcoin plunges; USD fails to hold gains – Oil tanks down 2.3%
Upcoming high impact news:
▸ 23:45 EUR Minimum Bid Rate
▸ 00:30 ECB Press Conference
▸ 03:00 CAD BOC Gov Poloz Speaks
▸ 07:35 CAD Gov Council Member Lane Speaks
US markets – fought back from earlier low’s after Cohn news hit markets, another wild session on the Dow Jones as price fell as much as 300 points before gaining buyer momentum to close 82.76 lower. Hint’s coming out of the White House suggested Mexico and Canada may be exempted from the proposed tariffs helped buyer confidence. Trump is expected to release more details on his tariffs plan on Thursday or Friday. The S&P500 closed 1.32 pts lower and the NASDAQ added 24.64 pts supported by solid gains in Facebook and Alphabet. The day started in the red as Gary Cohn resigned due to the proposed tariff’s. The US30 opened sharply lower on the news testing 24,400 to the downside.
Oil – fell on Wednesday losing 2.3% in a solid drop, driven lower by an increase in crude inventories and output. Traders are also nervous about the current possibility of a trade war. Prices pared losses after data from the Energy Information Administration said U.S. crude inventories rose by 2.4 million barrels in the last week, compared with analysts’ expectations for an increase of 2.7 million barrels. U.S. output has also dented sentiment. The EIA said weekly U.S. crude production hit a record high per day last week of almost 10.4 million barrels. The EIA said it expects U.S. crude output in the fourth quarter of 2018 to reach an average of 11.17 million bpd, up from the previous forecast a month ago of 11.04 million bpd.
European markets – rallied overnight recovering from earlier falls after Cohn resignation drove global markets lower. The FTSE added 11.09, the DAX closed 131.49 higher and the CAD closed 17.60 higher. Auto stocks were among the best performers, Renault hitting 8% after talks with Nissan. Rolls-Royce surged to the top of the European benchmark after the firm said it remained on course to meet its financial goals for 2020. The European Union outlined a three-pronged response to proposed metals tariffs from Trump’s administration Wednesday, including items such as peanut butter, cranberries and orange juice that could see higher charges in Europe.
Forex – USD started the day stronger as uncertainty ruled after Cohn’s resignation. The AUD had a hard morning driven lower by several influences including Governer Lowes comments and a GDP miss. The AUDUSD fell by as much as 60 pips before fighting back. The AUDJPY dropped by as much as 105 pips. The JPY had a strong morning to all the majors as traders looked too safe havens. The EURUSD basically ignored the morning’s turmoil to holding higher. Risk continued higher through London and into New York, most pairs finishing higher to the USD and JPY. The AUD being the only risk major to close in the red. The USDJPY closed slightly lower after fighting back from 60 pip loss. Gold opened higher but as market turmoil abated sellers locked in. Price closing close to $12 lower.
Bitcoin fell back below 10K overnight. Price has dropped for two days losing close too 1600 dollars. The SEC said in a statement Wednesday that online platforms trading digital assets that are considered securities need to register with the agency. In other news, a New York judge has ruled cryptocurrencies to be commodities. Price has found a short-term low at 9320 from the daily chart.
GOLD – failed at 1340 for the third time yesterday. This morning buyers are holding at short-term 1323.50 support. With a break of the med-term trendline and resistance at 1326.50. Are we seeing a turn in trend confirming?
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
* The information provided here has been prepared by EightCap’s team of analysts. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and do not reflect the opinions of EightCap.
In addition to the disclaimer on our website, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. EightCap accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.
Please note that past performance is not a guarantee of or prediction of future performance. This communication must not be reproduced or further distributed without prior permission.