News & Analysis
US shares fall after long weekend – Europe gains; USD pushes back into the black; Gold tumbles – Oil snaps 4-day winning streak
Upcoming high impact news:
▸20:30 GBP Average Earnings Index
▸01:15 GBP Inflation Report Hearings
▸06:00 USD FOMC Meeting Minutes
US markets – closed lower on Tuesday as traders returned from an extended weekend. The Dow Jones closed 254.63 points lower, the S&P500 finished 15.96 lower and the NASDAQ closed 5.16 points in the red. Wall Mart missed earnings expectations falling 10.2 percent, having its worsed single day since January 1988! Front-month Cboe Volatility index (VIX) futures were trading higher than the rest of the curve, signalling “we’re going to need some more repair work.” The VIX rose 6.4 percent to 20.71. The benchmark 10-year U.S. note yield rose to 2.886 percent, after hitting its highest level since 2014 last week. The short-term two-year note yield, meanwhile, traded around a nine-year high. Adding to pressure stocks in last night’s session.
Oil – snapped a 4-day winning streak overnight to close 75 cents lower back below $62 a barrel. Traders could keep an eye on $61.54 it may continue as short-term support. A break could signal a deeper leg lower.
European markets – closed mainly higher on Tuesday led by corporate earnings. Shrugging off a weaker lead from across the Atlantic. The DAX added 102.30 points, the CAC closed 33.68 points higher and the FTSE just slipped into the red losing 0.89 points. Chemicals was a top performing sector on Tuesday, closing up 1.17 percent boosted by Covestro, which closed up 3.33 percent. SimCorp rose to the top of the STOXX 600, jumping over 12 percent by the close after reporting strong growth in its fourth quarter, and stating that its dividend payout for 2017 would be higher. France’s Edenred rose 6.5 percent on the back of strong earnings that saw the company’s earnings before interest and tax, and net profit for 2017, reach record levels. Mining giant BHP Billiton posted a 25 percent rise in underlying half-year profit on Tuesday. On the other side, HSBC shares fell by 3% due to worse-than-anticipated earnings.
Forex – the USD lead the charge last night hitting a 6-day high. Strong gains were seen to the JPY and CAD. The USDCAD rallied 87 pips to jump back into the 1.26 handle. The USDJPY continued its strong week adding another 72 pips. Buyers have recovered 118 pips since Friday’s close. The JPY was weaker across the board overnight losing ground to the majors. The AUD added 27 pips despite losing 29 pips to the USD. The EUR continued lower to the USD falling by another 70 pips. It had a positive session to the JPY but fell to most crosses. The GBP was last night’s surprise as it pared losses to finish flat to the USD. 1.3990 continues to hold for buyers. The GBPJPY surged adding 102 pips.
Gold was hammed last night, sellers started during the Asian session and didn’t let up, price closed $17.67 lower. Sellers have trimmed $25 off its value since Friday.
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.