News & Analysis

Stocks rebound; USD fights back; Gold eclipses Friday’s gains

Nov 20, 2017 | Daily Market Outlook

Today’s high impact news:

11:30 AUD Monetary Policy Meeting Minutes
20:05 AUD RBA Gov Lowe Speaks
21:00 GBP Inflation Report Hearings

Tuesday saw buyers return to U.S stocks with gains across the major indices. The Dow Jones closed 72.09 points higher, The S&P500 closed 3.29 points higher and the NASDAQ added 7.92 points. Wall Street bet tax cuts would keep the economic expansion going. Expectations of tax reform have been a positive for stocks this year, as a tax-code overhaul would potentially lower corporate taxes. The S&P 500 is up more than 15 percent in 2017.

European stocks started the session weaker but recovered, Germany’s failed coalition the key story overnight. Angela Merkel is to consult with the German president, but fresh elections are a likely outcome. Autos were Europe’s top performing sector, closing up 1.33 percent overall, with German and French carmakers leading the way. Volkswagen rose 4.19 percent after news emerged over the weekend that the manufacturer would invest 22.8 billion euros ($26.9 billion) in its main car brand over the course of 2018 to 2022. Porsche, which is owned by Volkswagen, popped 4.48 percent. The DAX finished the session 64.93 points higher the FTSE closed 8.78 points higher.

FX – the USD, EUR and Gold where last night’s big movers. Political uncertainty pushed the EURUSD lower after a night of swings. The E/$ rallied 80 pips to move above 1.1800, this was very short lived as sellers quickly retuned taking it 66 pips lower to close at 1.1732. The USD flexed its muscles, knocking the GBPUSD down from highs for the 2nd day and continuing to put pressure on the AUD. The AUDUSD closed lower for a 4th session. The USDCAD closed 57 pips higher finally achieving a close above the 1.2790 range high, it’s first since 3rd of November. The JPY traded lower, the AUD, GBP and USD closing higher. Gold was taken apart by the higher USD losing all of Friday’s gains to close $16.67 lower at $1276.30.

Gold – gave back all of its gains as the USD came knocking on gold buyers conviction. Price looks stuck in an ending diagonal at the moment and it’s going to be interesting to see which side prevails with a breakout.

Good trading from Eightcap.

Sources; Reuters, CNBC

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