News & Analysis

NASDAQ hits new record highs – Dow – Europe higher; USD mixed after U.S. CPI; Yen continues to be sold – USDJPY above 112.50

Jul 13, 2018 | Daily Market Outlook

Upcoming high impact news:

No high impact news to be released in Friday’s session.

U.S. markets rallied overnight, the NASDAQ hitting new records, 7,823.92. Facebook, Amazon both hit all-time highs helping push the NASDAQ to record levels. Corporate earnings season has started. The Dow Jones climbed by 224.44, Cisco and Intel the best-performing stocks.

Eric Freedman, chief investment officer at U.S. Bank Wealth Management, said the lack of an immediate response by China is a positive for the market. He also noted that, while these tariffs are aimed at several Chinese imports, “the mixture of goods is different from that of the first round of tariffs. Also, they don’t come into effect until August.”

Weekly jobless claims fell to 214,000 last week and CPI data missed expectations hitting 0.1% while Core CPI met forecasts hitting 0.2%. Fed Chairman Jerome Powell said he believes the U.S. economy remains in a “good place,” with recent government tax and spending programs likely to boost gross domestic product for perhaps three years. – CNBC

Equity markets in Europe rebounded after the previous sessions sharp losses. Media rallied 2.3% after news that the U.K. government cleared the way for Twenty-First Century Fox’s bid to buy Sky. Gerresheimer led the gains in Europe, closing up by 7.6% after the company announced an extension of its business model and upgraded growth forecasts. –CNBC

The Stoxx 50 added 23.35 – the FTSE added 59.37 and the DAX closed 75.84 higher.

Gold held its rally overnight adding 5.50, buyers paring earlier loses at this point in the day. Oil made a new weekly low but pulled back to close slightly higher. The market shrugged off a warning that spare capacity may be stretched as OPEC and Russia increase production. USOUSD is lower today but we’re looking for 69.10 to continue as 4H support.

Risk currencies ended Thursday mixed, a pause in trade war fear lifted the AUD as it added 42 pips to the USD and 88 pips to the Yen. The EUR and GBP rallied to the Yen but finished lower to flat to the USD. The ECB Monetary Policy Meeting Accounts didn’t deliver hard direction as after the E/$ rallied is fizzed to test lower, settling flat.

In today’s trade, the EUR and AUD are holding to the USD, the AUD is in the black. The majors continue to trade higher to the Yen, apart from the GBP which is off lows. The USDJPY soared in yesterday’s trade, closing above 112.50. Buyers have hit a high of 112.76 in today’s session but steam looks to be dropping as this point lines up with a previous high.

Bitcoin dropped 181 overnight, buyers have returned this morning price 79 higher after sellers tested 6060 this morning. 6120 is the current 4H support we’re keeping an eye on.

Local shares are slightly lower, the ASX200 trading 15.20 pts lower. The main Asian indexes are mixed with eyes on Chinese trade balance data coming out. The Nikkei is 293.04 pts higher. The Hang Seng 158 pts higher.

Good trading from Eightcap.

Sources; CNBC – All times are AEST

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