News & Analysis

US stocks surge on earnings; USD back in the black; Oil lifts

Oct 25, 2017 | Daily Market Outlook

Key data and releases coming up:

  11:30 AEDT – AUD CPI, Trimmed CPI
  19:30 AEDT – GBP Prelim GDP
  23:30 AEDT – USD Core Durable Goods
  01:00 AEDT – CAD BOC Monetary Policy Report, BOC Rate Statement
  01:30 AEDT – OIL Crude Oil Inventories
  02:15 AEDT – CAD BOC Press Conference

Tuesday saw US stocks return to surge mode as 3M and Caterpillar beat earnings expectations. The Dow Jones added 168 pts, the S&P500 added 4.15, to close at new record highs. Wall Street was also hopeful that tax reform could pick up steam in Washington. The Dow is closing in on 23,500 already! This is turning into one the most feverish rallies that can be remembered. The US30 has added 1043 pts this month with only three lower closing sessions!

The USD gained overnight as tax reform and fed chair gave support. The USDCHF USDCAD and USDJPY all finished higher. Gold took a back step losing $6. Support still stands at 1271. Oil added 60 cents driven by Saudi comments on output. Buyers tested Septembers $52.60 high.

Europe had smaller gains as the FTSE closed 2 points higher and the DAX added 10. The DAX started lower, surged 70 pts higher post positive data. Mixed earnings took the shine off the season. The Euro had a better session overnight impressed by better than expected new coming out of the EU.

Frances employment has picked up, Germany’s manufacturing increased. The GBPUSD lost ground finishing 70 pips lower. 1.3224 looks set as resistance at the moment.

Hope you have enjoyed the break from high impact news, from 11:30 this morning things on the news front really pick up. Australia’s CPI is due out this morning. Currently, we’ve seen weaker retail sales but better employment. Today’s CPI could set the tone for the RBAs next move. There will be important data coming out for the rest of week, form the ECB, UK, BOC, and the U.S.

AUDUSD looks vulnerable on the daily chart after breaking lower overnight. A miss in today’s CPI (lower than expected) could see the AUDUSD move sharply lower as the RBA did hint that future rates cuts have not been ruled out. A drop in CPI adds to that possibility.

Good trading from Eightcap.

Sources: Reuters, CNBC

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