News & Analysis

US stocks edge higher tariff worries remain; USD knocked lower Korea’s set for direct talks; Risk – Gold jump; Gary Cohn resigns – markets shocked

Mar 6, 2018 | Daily Market Outlook

Upcoming high impact news:

▸ 11:30 AUD GDP
▸ 00:15 USD ADP Non-Farm Employment Change
▸ 00:30 CAD Trade Balance
▸ 02:30 CAD BOC Rate Statement – Overnight Rate
▸ 02:30 Oil Crude Oil Inventories

US markets – closed higher on Tuesday after a volatile session. The Dow dropped by 166 points during the session but managed to close 9.36 points into the black. The S&P500 closed 7.18 pts higher and the NASDAQ closed 41.30 higher support by Netflix and Amazon. The Tariff issue continues to remain in the spotlight, Gary Cohn Presidents Trumps leading adviser has resigned this morning. Cohn, a former Goldman Sachs executive, was a champion of the tax cuts implemented by the Trump administration last year. Bloomberg News reported citing sources that Trump was convinced Cohn would leave the administration if the tariffs proposed by the president were implemented. This resignation could reignite stock market volatility.

Oil – failed to hold gains overnight closing 21 cents lower. Buyers did test $63.10 before sellers took over. Further weakness this morning mainly USD driven has seen a test back below $62.00.

European markets – closed higher with Italy’s political uncertainty and US tariffs continuing in the background. The FTSE added 30.77, the DAX gained 23 points and the CAC closed 3 points higher. Italian shares on its FTSE MIB index closed up over 1.5 percent, as traders waited for clarity on which parties are going to form the next government following the inconclusive vote over the weekend. The Cohn new has seen the GER30 gap lower this morning opening 124 points lower.

Forex – news North and South Korea will hold direct talks. The USD hit a one-week low. The USDCAD snapping a 6-day winning streak to finish 87 pips lower. Risk currencies jumped; the AUDUSD EURUSD NZDUSD adding over 60 pips. The Japanese Yen continued its drops as the majors continued higher. The AUDJPY and EURJPY adding further to this week’s gains. Gold jumped adding $14.20 to a weakening USD. This morning fortunes have reversed due to the news of Gary Cohn resigning. Risk has dropped to the USD and JPY. The USDJPY has also been dumped trading 57 pips lower. Gold has gaped $3 higher as traders look to safe havens. The JPY is leading the charge this morning, the AUDJPY is 75 pips lower giving back yesterday’s gains. This news could have wider implications today and could see further volatility as the day progresses. The main impact we see going to be for stocks.

US30 – the Cohn news has not been good to stocks this morning, the US30 gaped 293 points lower. Can buyers hold 24,460? The safe havens are in full swing JPY, USD are higher to risk.

Good trading from Eightcap.

Sources; CNBC.  All times are AEDST

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