News & Analysis

US indices jumped on Friday hitting fresh records – Europe followed with strong gains; USD reversed to majors AUDUSD above .81 cents. Oil back above $66.

Jan 29, 2018 | Daily Market Outlook

Today’s high impact news:

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U.S markets – continued to march into new records on Friday, the Dow Jones added 223.92 closing at 26,616.71. The S&P500 added 33.62 closing at 2872.87. The NASDAQ had enormous session jumping by 1.28%, closing at 7505.77. Corporate earnings continued to top estimates, this earnings season has been strong thus far. Of the S&P 500 companies that have reported as of Friday morning, 80 percent have reported-better-than-expected earnings while 82 percent have surpassed sales estimates, according to data from Thomson Reuters I/B/E/S. Wall Street also digested key U.S. economic data on Friday. The Commerce Department the U.S. economy grew by 2.6 percent during the fourth quarter of 2017. Economists polled by Reuters expected a gain of 3 percent. “These are disappointing numbers, no doubt, especially because 3% growth has become a sort of new normal,” Mike Loewengart, vice president of investment strategy at E-Trade. U.S. durable goods orders rose 2.9 percent in December, according to the Commerce Department. Economists expected an increase of 0.8 percent. President Donald Trump addressed world leaders in a speech at the World Economic Forum (WEF) in Davos, Switzerland, on Friday. Trump told the conference that the U.S. wanted “fair” and “reciprocal” trade, criticizing countries that he said “exploit” others in trade deals. Oil recovered on Friday, after Thursday’s fall adding 96 cents to close back above $66 a barrel. European markets – finished higher on Friday, the FTSE closed 49.70 higher. The DAX closed 41.81 pts higher and the CAC closed 47.94 pts higher. U.K. gross domestic product (GDP) data showed that the British economy had accelerated during the last three months of 2017, rising 0.5 percent according to data by the Office of National Statistics.

Forex – the USD roller-coaster continued on Friday as dollar bears returned. US GDP not helping the bulls case as it missed 3.0% expectations coming in at 2.7% due to surging imports. The USDCAD lost 64 pips dropping below 1.2300 for the 2nd time in a week. The USDJPY lost 84 pips hitting 108.26, setting a new weekly low. Risk bounced back, the AUDUSD surged by 88 pips to close above .81 cents. Marking its highest close since 2015. The EURUSD and GBPUSD failed to hold their rallies, the GBPUSD finished 23 pips higher after hitting 1.4285. Japanese Yen strengthened on Friday knocking the EUR and GBP lower. The AUDJPY held gains closing 26 pips higher being the one major that made gains to the JPY on Friday. Gold closed $3 higher after trimming gains. Price traded up to 1357.07 before trimming gains. 1345.50 continues to offer buyers support from the daily chart. This week data wise things start out slow with no key data coming out today or tomorrow, things pick up from Wednesday, with  BOE Gov Carney, Australian CPI, President Trump Speaking THURS – FOMC Statement, Federal Funds Rate and on FRI – Non-Farm Employment Change.

GBPJPY  – has returned to a potential demand level at 153.40. If buyers can hold will we see a new trend continuation develop?

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST

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