News & Analysis

US Stocks Pause Run; DAX Touches 13,000; GBP’s Wild Night

Oct 12, 2017 | Daily Market Outlook

Key data releases for today:

  23:30 AEDT – USD – CPI; Core CPI; Retail Sales; Core Retail Sales

US stocks took a breather overnight with Dow -31.88; S&P500 -4.31; NASDAQ -12.04. Producer inflation rose in September to 0.4%. Gasoline recorded its largest gain in more than two years, driven by supply interruptions in the gulf by recent storm activity (this figure met expectations). Unemployment benefit requests dropped to 243K beating expectations of 251K. The USD picked up with USDCHF closed 21 pips higher. With the PPI on target, interest rate attention will be on tonight’s US CPI and Retail’s Sales data.

Europe had a busy session overnight with FTSE at +22.4 and the DAX added 12.21 touching 13,002.34 – a record high. The GBPUSD also had a wild night as Brexit continues to take centre stage. Deadlock talks cut into the cable sending it 139 pips lower at one stage. The cable reversed with news that Barnier may offer the UK a two year transition to stay in the EU and price surged, adding 133 pips in four hours. The EUR had a softer night, dropping 25 pips to the USD and 149 pips to the NZD.

Oil lost 80 cents at its low overnight trading down to $50.41. Inventories came in at -2.7M and missed expectations, and buying quickly took hold. Price trimmed loses to settle 25 cents lower at $50.98. Gold buyers tested 1297 September levels but lost interest, price settled $1.50 higher at $1293.34
The AUDUSD has continued to climb adding 32 pips, today slightly higher. ASX200 has started Friday on the buy adding 10 points to 5804.

GBPUSD – 1H chart showing last night’s roller coaster. 1.3121 – 1.3290 in 6 hours.

Gold – after five straight days of gains, price stalled overnight as buyers failed to close above 1294.50. It makes you wonder if price will continue higher or will we see a correction develop?

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