News & Analysis

Stocks mainly higher – NASDAQ new records – US China trade – Political tensions continue to cool in Europe; AUD surges after massive retail Sales surprise

Jun 5, 2018 | Daily Market Outlook

Upcoming high impact news:

14:30 AUD RBA Rate Statement – Cash rate (EXP hold 1.50%)
18:30 GBP Services PMI
00:00 USD ISM Non-Manufacturing PMI

U.S. stocks gained in last night’s session, investors continued to keep an eye on lingering trade concerns after the U.S. imposed tariffs on steel and aluminium imports from the European Union, Canada and Mexico while coming away with no major breakthroughs from the most recent round of trade talks with China. Apple and Amazon notching record closing highs which helped push the NASDAQ to new record highs.  Indexes closing higher for the 2nd session in a row, the Dow Jones +178.48 – The S&P500 +12.25 – The NASDAQ +52.13

Markets in Europe ended higher led by gains in utility stocks. French flag carrier Air France-KLM surged near the top of the European benchmark after AccorHotels said Sunday it was reviewing whether to buy a stake in the company. Banking stocks also moved higher as political issues in Spain and Italy continue to ease. The Financial Times reported that French bank Societe Generale and Italian rival Unicredit were exploring the possibility of a merger. The FTSE +39.52 – STOXX600 +1.20 – DAX +46.48

Locally the ASX200 S&P200 opened lower after a weaker lead from SPI, currently trading 23.80 pts lower. Are traders starting to worry rates could soon move north due to the supprise retail sales data? Other Asian markets trading mixed Nikkei 53 pts higher, Shanghai 3.92 lower.

Oil held higher most of the day but lost buyer traction into the NY session. “It’s all about supply, whether it’s OPEC raising output or U.S. increasing production, all roads lead to higher global oil supplies, which is leaving oil traders shaking in their boots,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore. USOUSD finished 80 cents lower notching it’s third straight decline in a row.

Gold followed trade developments, after rebounding late into the European session sellers returned as China U.S. trade talks made progress. Price lost momentum finishing 94 cents lower giving back its $5.50 rally higher. $1290 continues as support for now traders.

Risk tracked mainly higher to the USD, the AUDUSD the day’s standout flying higher after retail sales beat expectations coming in at 0.4%. It’s a massive figure as the last data decreased to 0.0%! The Aussie surged, adding 85 pips to the USD and 124 pips to the JPY. The EURUSD held firm supported by signs of stability in Italy and Spain. The GBP ended lower to the USD after posting a 59 pip rally. The JPY weakened as global worries continued to abate. The majors all making gains, the USDJPY ending 39 pips higher, closing back in on 110 handle.

Good trading from Eightcap.

Sources; CNBC All times are AEST

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