News & Analysis

Dow Jones roller-coaster – 400 point drop after FBI raids Trumps Lawyer; USD sinks Trade War fear continues; Oil makes sharp rebound

Apr 10, 2018 | Daily Market Outlook

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▸22:30 USD PPI

US markets – finished higher on Monday but the Dow Jones had another volatile session as current and new influences hit the market. The Dow Jones finished 46 points high after trading up to 440.42 at one stage. Sellers massed in the last hour of trade when news hit the President Trumps lawyer’s office had been raided by the FBI. This news sent the market crashing. The S&P500 8.69 points higher and the NASDAQ closed 35.23 higher, both finishing off session highs.

“It’s certainly sending it down into the close,” said Andrew Brenner of National Alliance Securities, about the report, which was later confirmed by NBC News. “I think the equities market was having its own negative momentum.” The New York Times reported the FBI raided Michael Cohen’s office. Cohen is Trump’s longtime personal lawyer. “There are two important conflicting signals right now emanating from the White House: The pro-business signal has been powered by deregulation and tax cuts. The protectionist signal raises the prospects of a trade war, which would be bad for business,” Ed Yardeni, president and chief investment strategist at Yardeni Research, wrote in a note Monday.

European markets – closed mixed on Monday giving back gains as was seen in the US session. Deutsche Bank has appointed Christian Sewing as its new chief executive officer, taking effect immediately. Basic resources closed 0.9 percent down after a rocky day’s trading. It had fallen over 1.6 percent earlier in the afternoon. Glencore tumbled during Monday’s trade, closing down 3.4 percent. But, the U.K.-Swiss mining firm had pared back losses from hours earlier given that it was down by 5.2 percent during the session. The FTSE gained 11.11 points, the DAX added 20.48 and the CAC closed 5.15 points higher.

Oil – rebounded on Monday pulling back most of Friday’s loses. WTI closed back above $63 per barrel. Despite a softening of trade concerns, oil markets still face an abundance of supplies that puts pressure on producers to keep their prices competitive in order not to lose market share. “Oil prices rose sharply (on Monday) as a weaker U.S.-dollar and easing concerns about the trade war saw investor appetite return,” ANZ bank said. “Reports that back-channel talks over the trade dispute between the U.S. and China are ongoing helped soothe investor angst,” it added. This morning prices are trading 17 cents higher, the 4H chart show’s resistance from 63.45 – 63.60.

Forex – produced some good moves overnight. The USD fell on continuing trade fears. The USDCAD gave up a 60 pip rally to finish 63pips lower. The Yen was mixed, losing ground in the London session to regain losses to some pairs into the US session. The USD last night’s weakest major currency finished 19 pips lower to the Yen. The GBP flexed last night rallying most the night to finish 49 pips higher the USD but trimmed gains to the JPY. The EURUSD had a mini break out gaining 38 pips after beating last Friday’s close. The AUDUSD looked very weak during the London session testing last week’s low’s before being driven higher, price closing 17 pips higher. Price has continued to rally today adding a further 17 pips.

AUDUSD – sellers tested and failed at lows with new USD weakness can buyers break .7715 to make new April highs?

Good trading from Eightcap.

Sources; CNBC.  All times are AEST

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