News & Analysis
Stocks recover after US CPI scare; Gold surges by $21; EIA report gives Oil a boost; USD sinks after mixed data – EURUSD back above 1.24
Upcoming high impact news:
▸11:30 AUD Employment Change – Unemployment Rate
▸00:30 USD PPI
▸08:30 NZD Business NZ Manufacturing Index
▸09:30 AUD RBA Gov Lowe Speaks
US markets – traded higher on Wednesday, far from smooth sailing as we saw a fast drop after the CPI data showed an increase and yields rose sending jitters through the markets. Retail sales quickly countered the CPI data as it missed expectations. This took the fear out of interests and saw buyers return taking US stocks higher. Indices closed higher for the fourth day in a row. Apple and FaceBook lead the charge, FaceBook jumped by 3.7% and Apple increased by 1.8%. The Dow Jones finished 253.04 points higher. The S&P500 added 35.69 points and the NASDAQ jumped by 130.10 points. “It almost looks like the market is realizing the economy is still doing well,” said Ryan Detrick, senior market strategist at LPL Financial. He noted, however, the market is “still in the process of carving off a bottom. … There’s going to be more volatility ahead.”
Oil – after testing weekly lows oil recovered late session to post a 180 cent gain. EIA inventories drove the rally as US stockpiles came in less than expected. U.S. crude inventories rose 1.8 million barrels last week, Energy Information Administration (EIA) data showed compared with expectations for an increase of 2.8 million barrels.
European markets – closed higher in a strong session, traders mainly ignored the CPI data that came out in the US to focus on strong corporate earnings. The DAX added 142.66 points, the FTSE added 45.96 points and the CAC closed 56.02 points higher. The euro area economy maintained a healthy growth pace at the end of last year, paving the way for another robust performance in 2018. Coca-Cola HBC rose 4.8 percent. France’s Credit Agricole posted a 33 percent jump in profits for the final three months of 2017. The UK100 tested 7260 high in last night’s trade, we would like to see buyers beat this point to continue to show bullish momentum.
Forex – data set the tone last night as US CPI sent the USD higher before Retail Sales halted its rally. The USD tumbled lower as rate fear subsided. All the majors made strong gains after making tests lower. The EURUSD added 98 pips to close back above 1.2400. The AUDUSD added 68 pips moving back above .7900. The Japanese Yen went into roll mode, majors made strong moves lower during the day before we saw strong fightbacks into the NY session. Not an easy session to trade, the EURJPY fell by 153 pips before recovering all of it’s loses to finish 6 pips higher! Gold – had a wild session, buyer’s maintained control until the end of the Asian session. Sellers took over, CPI data set up a $17 drop before the recovery began price rallied 33 dollars from its low to its close. 1355 has started to present some resistance traders could keep an eye on this level.
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
* The information provided here has been prepared by EightCap’s team of analysts. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and do not reflect the opinions of EightCap.
In addition to the disclaimer on our website, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. EightCap accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.
Please note that past performance is not a guarantee of or prediction of future performance. This communication must not be reproduced or further distributed without prior permission.