News & Analysis

Stocks see red; BOE holds rates; EUR falls after ECB press Conference; AUDUSD above .7650

Dec 15, 2017 | Daily Market Outlook

Today’s high impact news:

No high impact news today or tonight.

Equity markets traded lower overnight, positive retail sales data failed to influence the U.S markets as the Dow Jones snapped a 5-day winning streak closing 76.77 points lower. The S&P500 dropped 10.84 pts and the NASDAQ closed 19.27 points lower. Traders conference waned due to two GOP Senators raising concerns about the tax bill. Republican Sen. Mike Lee was undecided on whether to support the tax bill, while Sen. Marco Rubio currently opposes it. However, their stances could change if some tweaks are made to the bill. “This market has been going in lockstep with the progress made in the tax bill,” said Art Hogan, chief market strategist at B. Riley FBR. “When you see bumps in the road, you’re going to get some volatility.”

European markets closed in the red for the 2nd day. Utilities were the worst performing sector Thursday, closing down 1.29 percent, with most of its stocks closing in the red. Industrials also came under pressure, amid worse-than-anticipated company forecasts for 2018. The FTSE closed 48.39 lower and the DAX closed 57.56 pts lower, price is getting very close to 13,000 again.

Forex continued volatile trade with a 2nd day of major data. No surprises in the UK as rates came in as expected. The ECB also held it’s minimum bid rate at 0.00. The EUR and GBP traded choppy through the LON session. The GBP lost ground to the majors on the rates hold and finished the session flat to the USD. The ECB press conference produced some negative influences for the EUR. Mario Draghi advised inflation needs an increase of stimulus to increase. GDP projections, 2.3% in 2018 [1.8%], 1.9 in 2019 [1.7%] and 1.7% in 2020. Indicators strong pace of growth. Strong momentum signals inflation will pick up. The EUR found no confidence after this was released and was sold. Losing 48 pips to the USD and 72 pips to the JPY. Buyers want to see hard evidence inflation is stable to increasing. The AUDUSD continued its strong weekly run adding another 29 pips and closing above .7650 for the first time since November. We see potential resistance presenting from .7695 – .7700.

USD has started this morning flat to weaker, the AUS200 has traded mixed so far with a battle occurring from 5995. This weeks data deluge has ended, we have no high impact news coming out today or tonight. Have a nice weekend.

EURJPY was flattened last night after the ECB Press Conference failed to deliver anything concrete on the inflation front. 132.20 seen as potential short term support, buyers still need to confirm this level.

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST


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