News & Analysis
Stocks – USD continue retreat -Tax Reform worries continue; Gold and Oil finish week with rallies.
Today’s high impact news:
▸ 01:00 EUR ECB President Draghi Speaks
▸ 03:00 EUR ECB President Draghi Speaks
On Friday stocks continued to fall, loses started in the Asian markets and continued through to the U.S. session. In New York, the Dow Jones closed 101.12 points lower, the S&P500 closed 6.79 points lower and the NASDAQ lost 10.50 points. The Dow and S&P500 posted their first two-week loss since August. Treasury Secretary Steven Mnuchin told CNBC’s “Squawk Box” that he expects a Republican tax reform bill to be sent to President Trump by Christmas. The market has seen some turbulence recently, slipping from record highs, as concern remained about whether tax reform could be achieved by year-end. Expectations of tax reform have helped lift U.S. stocks to record levels this year. “Tax reform is the big macro story that’s driving everything,” said Luke Bartholomew, investment manager at Aberdeen Standard Investments. There is “cautious optimism at the moment,” about tax reform getting done this year.
European shares pared some losses on Friday but finished in the red, capping off a very average week. The FTSE closed -6.26 points lower, the DAX closed 53.49 points lower. Utility sector was the worst performing sector Friday, Carillion shares sank losing over 48 percent by the market close! European Central Bank President Mario Draghi said the bank needs to be patient. Sentiment in the U.S. continued to have a slight sway on markets in Europe, as investors worried about the future of U.S. tax reform.
FX, the AUD continued its poor week making new weekly lows to the USD and JPY. The AUDUSD lost 88 pips for the week while the AUDJPY gave back 203 pips, both trading back at June 17 levels. The GBPUSD had a 65 pip gain at one point Friday night and looked set for a strong close with the USD losing ground. Sellers returned to the NY session paring gains, price settled 15 pips higher failing to hold new weekly highs. Despite stronger building permit figures, the USD traded lower, Gold and Oil made the strongest moves to it on Friday. Gold closed $15 higher at $1294.07 posting a weekly gain of $19 making two positive weeks in a row and its highest finish since October. Oils performance came basically out of nowhere as it had traded in two very flat ranges after its fall on Tuesday. Buyers returned to the London session and didn’t let up through the NY session. Price added 131 cents. OPEC will meet on Nov. 30 to discuss policy, including extending a deal with producers to limit oil production.
Oil – after two very flat sessions buyers returned, sending price back above $56.
Gold – broke out above its weekly range on Friday night. We would like to see the range high become support to confirm this breakout has strength behind it.
Good trading from Eightcap.
Sources; Reuters, CNBC
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