News & Analysis

Stocks continue higher – FTSE jumps after resignations; Oil recovers; Risk currencies fire to the Yen

Jul 10, 2018 | Daily Market Outlook

Upcoming high impact news:

18:30 GBP – GDP – Manufacturing Production

U.S. Markets rallied overnight the Dow Jones added 320 – the S&P500 added 24.35 and the NASDAQ gained 67.81. Bank stocks rose at least 2.5%, led by Bank of America, Citigroup, Goldman Sachs and J.P. Morgan Chase. The SPDR S&P Bank ETF (KBE) rose 2.3% and posted its best day since March 26, when it gained 3.3%. Last Friday’s jobs data and cooling trade tensions also supported buyer momentum.

“The market can surprise you with what it’s focused on,” said Art Hogan, chief market strategist at B. Riley FBR. “Now we’re focused back on fundamentals.” “If you can take focus away from the trade war, that’s a good thing,” Hogan said.

European shares rallied with Brixit tensions in the background. News that U.K. Foreign Secretary Boris Johnson and Brexit secretary David Davis have quit. Air France-KLM was one of the Stoxx 600’s top performers, after posting higher passenger numbers for June. The Euro Stoxx 50 added 16.01 – the DAX added 47.42 and the FTSE closed 70.29 higher despite some political uncertainty during the session.

Currencies traded higher on the risk side with the Yen seeing the strongest selling overall. The GBP was rattled by government resignations but pared losses to the USD and JPY. The USDJPY is back testing key resistance this morning from the daily charts. Today risk has continued with its buyer momentum trading higher to the USD and JPY. The AUD so far is performing strongest.

Oil closed higher by global demand. Price closed 37 cents higher after sellers made a decent test lower twice during yesterday’s Asian and London session. Price is trading flat today. Gold failed to hold momentum seen during the European session giving back some gains to finish $2.40 higher. Buyers are retesting the range high this morning.

Local and Asian stocks are mixed today, the ASX200 is trading 16pts lower after testing 6300. This number is showing more signs of becoming a psychological barrier for buyers at the moment. The Nikkei is 221 pts higher and the Hang Seng is 186 pts higher. Chinese CPI met forecasts coming in at 1.9%. The China-A50 is 10.91 lower while the Shanghai composite is 4.68 pts higher.

GBP traders will be looking to tonight’s UK GDP and Manufacturing Production data coming out at 18:30 AEST.

Good trading from Eightcap.

Sources; CNBC – All times are AEST

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