News & Analysis
Stocks traded mixed – Dow Jones 3-day streak – Europe lower DAX drops 86 points, Gold rallies; USDJPY hammered – EURUSD jumps back to 1.235050
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▸00:30 USD CPI – Core CPI
▸00:30 USD Retails Sales – Core Retail Sales
▸02:30 OIL Crude Oil Inventories
US markets – continued higher on Tuesday after futures showed a weaker open. Markets fought back, the DOW closed 39.18 higher making it three positives closes in a row. The S&P500 closed 6.94 points higher and the NASDAQ closed 31.55 points higher. “Tomorrow will bring the most important CPI report in over 10 years, as rising inflation (which will cause higher interest rates) has become one of the biggest risks to this multi-year rally,” Tom Essaye, founder of The Sevens Report, said in a note Tuesday.
Oil – closed lower by 40 cents after running lower by 95 cents. Buyers took price back into its 58.85 support area. While this level continues we’re looking for buyers continue showing support. Traders should keep in mind tonight’s EIA report that may show further US inventory surprises renewing selling pressure.
European markets – finished lower on Tuesday, the FTSE lost 9.05 points, the DAX lost 86.27 points. A series of corporate earnings Tuesday yielded both positive and negative reactions on European trading floors throughout the session. Telenet shares fell on dividend concerns after the Belgian operator posted its 2017 results. U.K. consumer price inflation remained at 3 percent in January, the same level as in December.
Forex – saw a sharp gain in the Japanese Yen and a decline in the USD. The EURUSD made strong gains adding 64 pips. The GBPUSD added 50 pips support by higher than expected UK CPI data. The big story from last night was the charging Yen. The Bank of Japan committed to ongoing stimulus. This started the charge late Asian session, the JPY knocked all the majors hitting the USD the hardest. The USDJPY plummeted by 122 pips dropping back into the 107 handle. Selling has continued this morning price trading 35 pips lower looking to test yesterday’s low. Gold – added $6.60 yesterday, 1-hour resistance at 1329.95 has been beaten today price trading a further $4.60 higher.
Tonight’s US CPI data as mentioned above is looking very important to the health of the current counter-rally. The market broke due to interest rate fears, if tonight’s data comes in above expectations this could reignite fears and send stocks lower. The data is due out at 00:30 AEDST.
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
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