News & Analysis
Stock Indices recover; Gold tumbles; GBP continues higher; USDJPY back above 113.00; NFP to end the week
Today’s high impact news:
▸ 20:30 GBP Manufacturing Production m/m
▸ 00:30 USD Average Hourly Earnings m/m – USD Non-Farm Employment Change – USD Unemployment Rate
U.S indices closed higher overnight. Tech, which is the best-performing sector of the year, had been under pressure recently but posted a three-day winning streak on Thursday. Wall Street also looked to Washington for clues about tax reform and a possible government shutdown. The Dow Jones added 70.57, the S&P500 added 7.71 and the NASDAQ closed 36.47 points higher. Investors are weighing the possibility of a government shutdown. If lawmakers fail to craft a deal on spending by the end of the week, the federal government could close until a deal is struck. President Donald Trump said Wednesday a shutdown “could happen.” Randy Frederick, vice president of trading and derivatives at Charles Schwab, said he isn’t worried about a government shutdown adversely affecting the market. “After the last three shutdowns, the market has actually gone up,” he said.
Europe closed mixed on Thursday, the DAX added 46.30 but the FTSE lost 27.28. Brexit continues to run with conflicting news. Ireland is the current deadlock. Lawmakers from the British parliament’s Upper House have said that the U.K. should avoid a worst-case scenario of having a “no deal” outcome when it comes to Brexit.
The USD and GBP where last night’s big drivers. The USDJPY climbed back above 113.00, USDCAD climbed back above 1.2800. The AUD sunk to the USD making a return to JUN lows after losing a further 53 pips. The GBP was the only major to make gains to the USD closing 83 pips higher after a weak start to the day. The GBP had a solid session adding 197pips to the JPY, buyers are testing Septembers closing high this morning. Gold was trashed, support fell as the USD forced sellers into action. Gold lost $16 to close back in July levels.
Markets are now focused on Friday’s U.S. non-farm payrolls report, with investors looking at 200,000 new jobs for November, according to a Reuter’s poll. “Tomorrow’s jobs report will play a significant factor in keeping the (dollar) rally alive and heightening hopes for an early 2018 rate hike,” said Lennon Sweeting, chief market strategist at XE in Toronto. Non-Farm Employment expected, 198K increase. Unemployment Rate 4.1%. The USD is sitting pretty at this point, any big miss in the NFP figure could spark an exodus. Traders should expect quieter trade leading up to tonight’s employment data at 00:30 AEDST.
Good trading from Eightcap.
Sources; Reuters, CNBC
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