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.
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.
Good trading from Eightcap.
Sources; CNBC. All times are AEDST
* 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.