News & Analysis
Stocks Stumble – DAX drops 199 pts; USD six-day lows.
Today’s high impact news:
▸ 20:30 GBP Manufacturing Production m/m
US shares traded lower on Thursday as tax reform delay fears hurt sentiment. The Dow Jones lost 101.42 points, The S&P500 lost 9.76 points and the NASDAQ finished 39.06 points lower. Industrial shares were the worst performers on the S&P 500, falling 1.3 percent. A proposed plan by Senate Republicans would push slashing the corporate tax rate from 35 percent to 20 percent until 2019. The move contrasts with a bill working its way through the House. The proposed Senate measure would also alter the individual tax system. Expectations for tax reform have increased recently, helping lift the stock market to all-time highs. The major indexes briefly fell more than 1 percent on Thursday but managed to close well off their session lows.
The USD didn’t escape, finishing at six-day lows. Investors balked at emerging details of the U.S. Senate Republicans’ version of a tax cut plan. Rival Republican tax-cut plans were emerging in the U.S. Congress on Thursday that differed on issues such as cutting the corporate income tax, the deduction for state and local taxes and the tax on inheritances paid by the richest Americans. As with most days in markets what’s bad for one side boosts the other side. The AUDUSD, EURUSD and Gold all enjoyed the weakness to finish the day stronger. The EURUSD moved back above 1.1600 closing at new weekly highs. Gold added $3.74 to close above its daily range high. Palladium hit a 16 year high overnight touching $1.026.10 levels not seen since 2001. Oil closed higher as supply cuts and political tensions in Saudi Arabia continue to support demand.
In Europe, stocks finished sharply lower. Basic resources led the losses, finishing down 2.44 percent. Several miners posted sharp declines on the back of a drop in metal prices, with nickel dropping over 2.5 percent by the market close. The FTSE ended the session 45.62 points lower. The DAX had a shocker losing 199 points. The GBP traded mixed with Brexit back on the radar, Brexit talks resumed on Thursday with both sides hoping to break a deadlock in negotiations before the end of the year. The GBPUSD increased by 34 pips off the back off USD weakness, crossed fared worse. GBPJPY lost 14 pips after trading 84 pips lower.
EURUSD – buyers held support set earlier in the week to springboard to a 30 pip rally. Possible resistance is seen at 1.1662.
GER30 – strong falls overnight, two possible areas of support. Current area 13,166 and second area lower at 13,070, it’s catching dagger stuff at the moment confirmation required!
Good trading from Eightcap.
Sources; Reuters, CNBC
* 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.