News & Analysis

US Stocks take a breather after records; USD lower; Big week of news starts today in Japan

Oct 31, 2017 | Daily Market Outlook

Today’s high impact news:

 12:00 CNY Chinese Manufacturing PMI, Chinese Non-Manufacturing PMI

Bank of Japan, Monetary Policy Statement, BOJ Outlook Report, BOJ Policy Rate.  Tentative release.

17:30 Bank of Japan Press Conference

23:30 Canadian GDP

US stocks finished lower overnight as news emerged that Trump’s tax plan may face a gradual release. After Friday’s surge, last night’s  weakness wasn’t that large in the scheme of things. Profit taking could also be another reason for last night’s retreat.

The Dow Jones settled 85.45 lower; the S&P500 8.24 points lower; the Nasdaq barely changed at -2.30 points. The gradual plan has been considered but isn’t final yet. It is more likely that Trump will pick Jerome Powell as the next Fed chair. The USD failed to capitalize on this – USD sellers picked up into the NY session. USDJPY was one of the main targets as it settled 53 pips lower at 113.17 back at a two week low. Risk and commodity currencies however enjoyed the USD weakness closing mainly higher. The AUDUSD has made its two positive closes in a row, trading back at .7687. Gold, after a mainly soft day, finished $3.40 higher. WTI Oil has held close to Friday’s highs closing slightly lower at $54.16.

Europe’s major indexes finished mixed – the FTSE lost 17.22; the DAX added 12.03. Spain’s IBEX35 closed 2.44% higher as Catalonia’s fears stabilized again. The GBP had a stronger than expected night closing higher to a weaker USD by 90 pips.

We hope traders enjoyed the relative peace and quiet on the news/data front overnight. From today, things are going to pick up! BOJ kicks things off today and this week is extremely news and data heavy with major data, Central bank comments, funding rates for the rest of the week.

USDJPY  – sellers took charge taking price 53 pips lower. Friday’s failed high from 114.49 turned out to be a decent signal. Price reconfirmed 114.25 as resistance. 112.95 may come in as a buyer support point. With the BOJ reports today, traders should be prepared for potential JPY volatility.

Good trading from Eightcap.

Sorces Reuters, CNBC

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