News & Analysis

US indices finished lower – Dow snaps 6-day streak; USD fights back – AUDUSD drops below .81 cents – Oil fails to hold $66 losing 70 cents.

Jan 30, 2018 | Daily Market Outlook

Today’s high impact news:

▸ 02:00 USD CB Consumer Confidence
▸ 02:30 GBP BOE Gov Carney Speaks

U.S markets – closed lower on Monday as 10-year treasury yield shot higher, raising concerns higher interest rates may hurt the current bull market. The Dow lost 177.23 in it’s biggest fall for 2018. The S&P500 lost 19.34 and the NASDAQ lost 39.27 pts. Fears of higher inflation are sparking the sharp rise in bond rates this year. Stocks are off to a strong start for 2018. But a strategist at Goldman Sachs said there is a “high probability” the stock market experiences a correction in the coming months. Peter Oppenheimer, chief global equity strategist at Goldman Sachs, noted Monday that “correction signals are flashing” and is advising clients to prepare for a pullback. Another strategist at Stifel said the Federal Reserve would cause a correction this quarter, as it other central banks in tightening global monetary policy. The Cboe Volatility Index (Vix), widely considered the best gauge of fear in the market, rose 24.3 percent, or 2.7, to 13.77. Oil fell on Monday pressured by rising production. U.S. production is expected to hit 10 million barrels per day soon, and Canadian output is also rising. Buyers made a new weekly high of 66.34 before sellers took over. Price hit a low of 68.88 before buyers returned fighting back above $65.  European markets – traded mixed on Monday not taking to much influence from Wall St. Falls where stronger in the beginning of the session before the US opened. The FTSE closed 5.99 pts higher. The DAX 15.69 lower and the CAC finished 7.56 points lower. Interesting finish for European indexes as they looked a lot more unstable.

Forex – Monday saw a USD recovery, 10-year yield its highest in nearly 4 years due to inflation concerns. The Japanese Yen pushed higher to some majors back took a back seat to the USD. The USDJPY closed 26 pips higher after testing last weeks 108.56 closing low. The EUR and GBP lost further ground to the JPY, selling has continued today. The EURUSD lost 41 pips, buyers managed to hold 1.2365 this is a short-term low which is being retested today. A break could see sellers look to test 1.2310. The AUD held out to the JPY but lost ground to the USD, closing back below 81 cents. It’s going to take a bit more from the USD to turn an imbalance. Gold lost the most ground to the USD last night, price dropping by $9.60. Sellers breaching 1343 previous high low that did it’s best to offer support. Sellers managed to close below 1340. Price is trading lower this morning but has failed to make a new weekly low so far.

AUDJPY  – has broken trend with a new lower high developing, are sellers starting to develop distribution pattern?

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST

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