News & Analysis
US Stocks continue to new highs; Catalonia’s worries intensify; December rate hike at 83%
Major economic data releases for today:
▸ 11:30 AEST – Retail Sales; Trade Balance
▸ 23:30 AEST – CAD Trade Balance; USD Unemployment Claims; USD Trade Balance
▸ Bank Holiday in China
Overnight US stocks continued to climb. Yesterday we watched the DOW break through 20,000 and we saw the price at 22,661.61 – that’s a gain of 2661.61 with one mild correction. Last night the Dow Jones finished 19.97 higher; the S&P500 3.16 higher; the Nasdaq 2.91 higher. Europe saw a mixed session with the FTSE losing 0.53; the DAX higher by 67.87. Spanish share index IBEX 35 traded lower by 2.35% as Catalonian independence intensifies.
UK data finally picked up with the Services PMI coming in better than expected. This lifted the GBP off three week lows. Meanwhile, the USD started the NY session weaker but cut loses as ISM Non-Manufacturing PMI came in better than expected. ADP Non-Farm Employment Change showed more jobs growth with 135K jobs added in September beating expectations. Yellen didn’t comment on the economy or monetary policy in prepared remarks at a community banking conference. Interest rate futures traders are pricing in an 83% chance there will be a December rate rise. Crude inventories came in at -6.0M and OIL saw choppy trade hitting $50.80 before losing gains and finishing lower at $50.04. Risk traded mainly higher in a choppy session as this week’s key US employment data draws closer.
Risk is slightly higher this morning as USD trades lower. Gold after backing down from overnight highs is slightly higher this morning. After strong loses yesterday, the ASX200 has started Thursday flat sitting on 5650 support. AUD and ASX200 are awaiting Australian retail sales and trade balance data that’s due out at 11:30am this morning.
US30 buyers pushed price to new highs, yesterday’s candle far for convincing divergence continues to build. With the NFP due tomorrow we should take a cautious approach.
USDJPY continues to find buyers once price drops back into 112.60 area. Above buyers have been unable to break out above 112.95 – 113.15. Solid range at the moment with NFP tomorrow we should see a break-out with set market direction. We think it’s time to sit if trading the daily time frame.
AUS200 5654 continues to offer a floor, key data due at 11:30am this morning could set the tone. Further more US employment data due late tomorrow night. Plenty of potential fireworks to test both sides of the current support low. So far today buyers have resumed with a small rally.