News & Analysis
Shares mixed – DAX loses 1.16%; USD Sinks – USDJPY at 9-week lows; Oil touches $58.00
Today’s high impact news and bank holidays:
▸ Japanese Bank Holiday
▸ 20:30 GBP Second Estimate GDP
▸ 00:30 CAD Core Retail Sales
▸ 03:30 CHF SNB Chairman Jordan Speaks
▸ U.S Bank Holiday (Friday)
U.S shares traded mixed overnight, The Dow Jones fell 64.35 points, and the S&P500 lost 1.95 while the NASDAQ gained 4.88 points to settle at a new record high. Amazon the key driver for the NASDAQ gains. Amazon shares rose after CNBC reported the company’s cloud business is about to announce a huge health-care deal with Cerner, one of the largest health technology companies in the world. The S&P 500 and Dow Jones industrial average, meanwhile, finished lower after Federal Reserve expresses concern about the impact of the market’s sharp rise on the economy in a summary of its previous meeting.
European shares had a mixed session, the FTSE closed 7.68 points higher. Finance Minister Philip Hammond presented the government’s latest budget. In his speech, Hammond stated that the U.K. would be setting aside £3 billion ($3.9 billion) for Brexit. “The negotiations on our future relationship with the European Union are in a critical phase,” Hammond said, at a time when the ruling Conservative party is facing challenges surrounding the economy and on a political front. “We have already invested almost £700 million in Brexit preparations and today I am setting aside over the next two years, another £3 billion and I stand ready to allocate further sums if and when needed,” he said. The DAX had a shocker losing 152.50 points to close 1.16% lower. The DAX retraced two days of gains to settle at last week’s lows. Further moves lower are starting to suggest a change in trend.
FX had a lively night, the USD was key to most main FX moves. The dollar fell on Wednesday, hitting its lowest level since October marking its worst one-day performance in five months. The release of minutes from the Federal Reserve’s most recent policy meeting, weak U.S. data and technical trading aligned to send the dollar tumbling against both safe-haven and risky currencies. The dollar plumbed its lows of the day after the release of the Fed’s November meeting minutes showed policymakers may be starting to question a December interest rate increase as inflation has remained subdued. The EUR, AUD, GBP and gold all made strong gains. The USDJPY lost 120+ pips to fall back to September levels. The Japanese Yen was strong across the boards making gains to the majors. The EURJPY has returned back to 131.45 support.
Oil added 87 cents in another strong session this week, hitting $58.00. The Energy Information Administration reported a 1.9 million barrel drop in weekly U.S. crude inventories. These new price highs are going to make OPEC’s November 30 meeting very interesting.
EURJPY – fell back to 131.45 support level in last night session. This level has held for buyers since September. A break here sets up a change in trend and confirms last several months trade as distribution. Can the bulls reconfirm?
Oil – OPEC cuts to drive price lower? U.S inventories have countered this news on the short-term. Price has added 171 cents since Tuesday. We would like to see how price acts at these new highs. Divergence has developed but the price has yet to confirm any type of weakness. It’s a sit and wait market with potential for short opportunities.
Good trading from Eightcap.
Sources; Reuters, CNBC
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