Brexit & Q3 Earnings Report with Data Deluge.

By Kenneth@Xtrade - on October 17, 2019

Brexit & Q3 Earnings report with Data Deluge.

The Market’s response to the ongoings with Brexit, Q3 Earnings Report, US-China Trade saga and Middle – Eastern tension are all familiar phenomenon, while we have expounded at length in previous articles and post. Caution is still warranted as the rewards are sweet, the losses are also very real.

It remains that until the Brexit “Deal” & The US/EU/China trade saga are resolved with some written documentation to fall on, uncertainties dominate, swinging the pendulum in favor of the bulls or bears depending on the day’s narrative and interpretation of some market participants.

The Brexit: As Prime Minister Johnson and the EU echo progress with a solution to a “Hard Brexit” (leaving the EU without a deal). Market participates flocked to the GBP and FTSE 100. Increased bets sent the pound to its highest levels in recent times. Uptrends are contingent on concrete developments else gains may be trimmed.

US & China: Following a reconciliatory tone between the two biggest world economy, which bolstered global stocks at the beginning of the week hangs in the balance after China agreed to a Partial Deal with the US purchasing more US agricultural-based produce, does not wish to continue the trade negotiations if the US does not waiver or remove tariffs from the table.   Meanwhile, an open front between the EU & the US on trade negotiations persists. Rocking global stocks in tandem.

Global Stocks:

Were observed up trending with the exception of the Australian Markets which were lagging.

  • WALLSTREET: Bolstered by Earning reports, and upbeat trade talks which may subside due to a snag in the trade negotiations volatility is abounding albeit with room to capitalize on gains by scalping between the resistance and support.   

USA30: Earnings report from the likes Netflix, & Tesla to name a few boosted to stocks coupled with developments between the UK & EU. However, upside movement may be confined to the day highs at 27,086.0 an open of 26,935.0. Trading is likely to range between 26,876.0 – 27,086.0

  • THE EU MARKET:  Were seen bullish.

Germany30: Gains wings by the time of print 11:50 GMT trading between 12,631.0 – 12,807.0 up 0.40% at 12,701.5 at this stage trends may head to the support levels before correcting up.

Italy40: Was up 0.18% at 22,437.5 after rallying to the day’s highs t 22,607.50 oscillation between 22,320.00 – 22,607.50 plausible The RSI indicates a strong tendency for the trends to be limited into the comfort zone between the 30 & 70 thresholds. 

UK100: The twitter announcement from EU’s President Jean-Claude Junker confirming a last-ditch deal between the UK and EU paved way for an optimistic bunch of bulls to jump on the FTSE although the deal still needs the approval of parliament and the Irish border bone of contentions resolved. Stocks were observed up. 0.41% at 7,176.8 lurking in a range between 7,135.2 – 7,216.0

  • ASIAN MARKET: Were mixed most of the Australian markets were pulled down perhaps due to China’s instance that a way forward with the trade negotiation must not include tariffs from the US and perhaps from the downbeat economic reports.  

HongKong50: Caught stretching it wings at 26,924.0 ranging between lows at 26,710.0 and highs at 27,016.0

Malaysia 70: Had made some impressive moves grossing the 14 k threshold, however, the upside is now curbed pending further support. Trading between 14,208.49 – 14,106.32 down 0.19%at 14,137.17 like to revolve around this number for a while.

Commodities:

In recent time the usual correlations and inverse correlation between the commodities and the USD has been “funky” some metals fall while others rally on geo-politics

Oil:

The Oil reports revealed content built in the Oil stockpiles and inventories with Saudi Arabia back to full production ramped up by the US increased production activities in a world where demand output is diminished. Threats to supply seem to have very limited upside effect with the trading ranging between 52.64 – 53.47 at the time of print WTI prices were down 0.97% at 52.84. A further downside could be in the pipelines before Friday’s profit-taking.

Gold: In our previous post we remarked the following,

“Caught indecisive between 1,508.85 -1,522.15 do not be surprised to see abrupt slides possible to recent lows around 1,498.00 before correcting if China and the US make any advancement in the trade negotiation.” 

Today Gold opened at 1,493.95 and projected to trade in between 1,487.05 – 1,499.85 If market participants feel they have been taking for a ride again with no concession to the China-US trade deal nor Brexit. Traders will run to take cover with the safe havens. Pushing Gold prices to possible highs above the 15k threshold.

FX Market:

Experienced major paradigm shifts, driven by Brexit and various trade sanctions leading to various Central Bank adjustments. The DXY was seen down trending, which reveals the GBP and EUR gaining grounds against the greenback even though it remained close to all times highs in the 108 zone.

USD/JPY: Seen ranging between highs of 108.94 and lows at 108.48 at 108.73. The pair may have paved out its trading cycle for the day. 

EUR/USD: The EUR stood tall against the USD up 0.47% at 1.1122 aim to stay close to the day’s highs at 1.1139 from the previous close at 1.1070. downside to 1.1065 the day’s support may not be seen today.

GBP/USD: News of a possible Brexit deal ahead of the 31st October deadline resounded well amongst traders on the bullish side of the equation sending the pound to highs, shay away from the 1.3 thresholds. Trading between 1.2752 – 1.2988 caught at 1.2875 up 0.35% at the time of print.

For further details, please visit Xtrade.com. You may also leave your comments below.

Related links:

Write a comment

Your email address will not be published. Required fields are marked *

No comments yet, Be the first!