Not All Hands Are On Deck, US & Canadian Markets On Vacation

The Markets opened this week with a caveat and are likely to be dominated by ongoing trade war rhetoric between the US-China and the reshuffling of the NAFTA deal between The US, Mexico, and Canada.  On Friday Negotiations between Canada n US did not yet any conclusive results.

Not all hands are on deck, as US and Canadian Markets are closed for Labour day celebration which is likely going increase volatility and force investors to look elsewhere to hedge.

FX Market:

Emerging Markets were hit hard with the Trade war Saga, Exotic Currencies remain under pressure as the USD stands tall.

EUR- seems to be gaining unwanted attention as investors look for ways to hedge.

EUR/USD I likely to be in a range of 1.1590 – 1.1625

Commodities:

With the US and Canadian Market closed for labor day Celebrations. Investors laud to the commodities. However, WTI Oil remains sideways trading down 0.03% in between 69.54 – 69.99 by 07:27 GMT with volatility expected to sway in the upside.

Gold, Copper, and Silver were also seen bullish as investors hedge.

Global Stocks:  Are dismal Asia Share were down likely to weigh on EU shares until later in the day. There are only 3 firms reporting on Q2 earnings namely Manchester United plc. (MANU), China Finance Online Co. Limited (JRJC), and China Online Education Group. (COE) which are likely not going move the dial much.

  •  Germany 30:  is set in a range from 12,309.05 – 12,359.58  down 0.26%
  • UK 100: Received some attention as PM Theresa May rules out the possibility of another referendum. The UK 100 rose 0.62% with high and lows of 7,451.50 – 7,487.75
  • France 40: found its bearing between, 5,387.21 – 5,411.78
  • Italy 40:  oscillates between 20,235.00 – 20,350.00

The USD was also lost some of its glory as the DXY reflected a drop of 0.09%  ranging from  95.01 – 95.22. The apparent weakness gave way to the EUR, AUD, JPY to flex their muscle. Not so for the Turkish lira which is still in turmoil.

The Safe havens and commodities, on the other hand, got a break as investors looked to hedge profits the same way most did on Friday.

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Jitters Ahead Of the Long Weekend with US-Canada Labor Day Holidays

As most of the global markets ready for the weekend. Profit-taking amid reignited trade spats between the US vs, China, and Europe is back in the headlines disrupting market sentiment and adding to the capricious trends across the board.

President Trump rejected the first round of EU concession to elevate the tariffs saga. According to sources close to the matter, citing the deal worse than that of China.

In other reports, Mr. Trump indicated his disdain for the operation of the World Trade Organization. (WTO), threaten to pull the US out if the organization does not consider some changes, i.e. “If they don’t Shape up”.

Global Stocks: Fell as tensions mount. Asian Shares have been cringing since late Wednesday while the EU shares jump in and out of losses. Natural the US stock which has been largely bolstered due to Q2 earnings reports, and for a while positive feedback stemming from the US, Mexico, and Canada talks to redefine the NAFTA agreement. Flopped, although S&P and Nasdaq reported sessional highs.

  • Germany 30: Was down 0.91%  by the time of print 08:33 GMT trending down from 12,452.25-12,351.42 at 12,382.93 with now current support anchors.
  • UK 100: struggles to hold 0n to 7,500 thresholds, down 0.23%  and range bound from highs of 7,508.14 to lows of 7,482.75
  • France 40: The CAC 40 (FCHI), was equally battered shedding 0.68%  by the time of print to 5,440.60  and piping down from 5,471.05-5,438.83.
  • Italy 40:  remained parked in bearish territory down -0.66% at 20.365.00 and oscillating between  20,505.00-20,320.00.

The USD also lost some of its glory as the DXY reflected a drop of 0.10%  ranging from  94.77 – 94.55. The apparent weakness gave way to the EUR, GBP to stage a “Petite” come back.  GBP/USD  crossed the 1.30 mark however unable to find more support to shoot up remaining at 1.3014 unchanged with resistance and support set between 1.2993 – 1.3029.

  • The EUR/USD jumps in and out of gains at 1.1667 ahead of today’s EU Core Price Index. (CPI), and Unemployment Rate (Jul), reports for possible boosts. Trending in a range of 1.1660 – 1.1690.

The Safe havens and commodities, on the other hand, got a break as investors looked to hedge profits.

  • Currencies like the JPY and CHF/USD 0.25% rallied against the USD
  • The Gold Spot was up 0.57% at 1.212.00 trending on a path from 1,204.50 – 1,214.80.
  • While XAU/USD exhibited similar traits up 0.54%  from 1,198.66 – 1,208.85

Oil prices have been boosted by the reported draw in US crude oil inventories and a times sanctions.  However, the same US-led sanctions are causing havoc amid supply constraints to weigh on Oil. Crude oil prices swung past $70.36 resistance levels after trading sideways for nearly a week. Upside movements are seen as limited with abrupt downward swings in view. Trading between 69.92 – 70.36, ahead of today’s Baker Hughes Rig Count.

In the cryptocurrencies front. About 50% of the tokens are in a bearish mode including the blue-chip BTC which has receded from the 7,000 level to lingering around 6,960.9 albeit still up by 0.45%

As the Q2 Earning season slowly rolls out Wall street cools down with eyes in search for the next driving factors besides the political, trade tiffs Today on the docket are only two notable companies: Big Lots Inc. (BIG) and Golden Ocean Group (GOGL).

Meanwhile, Chinese Computer company LENOVO lunches the first laptop with two screens the Yoga Book C930 with a price tag of $1,164. How this will affect shares are yet to been seen. Investors are also paying attention to developments of the between the US & Canada on the deadline today for NAFTA resolutions.

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The Dollar and Oil Are Up? What happened?

Asian Markets were contacting as apparent weakness spotted in the Chinese Market drags amid the ongoing renegotiation between US, Mexico and Canada for a better NAFTA deal. Asian Shares retreated. The European Stock were also in a dismal state as Trade fears and Real Estate shares plummeted.

The USD is experiencing Capital in follows keeping the USD afloat, as investors price in the changes of a possible rate hike next month at almost 93%. Despite Fed Chair Jerome Powell’s caveat. Meanwhile, and as a direct result the safe-haven Gold losses its luster.  The XAU/USD pair was spotted at 1,202.76 down 0.32% and trading between 1,200.56 – 1,207.91.

In conjunction to yesterday’s post as per our summation, WTI prices were boosted by a better than expected crude oil inventories report from the Energy Information Administration. EIA, in which instead of a draw of 686 million barrels found a steeper decline of nearly 2.5m barrels. Ranging between 69.58 – 69.86 by the time of print at 08:30 GMT.  Some Analysts are under the impression due to supply constraints and sanctions on some of OPEC’s members, the prices of Oil may not exceed the $70bbl mark.

Meanwhile, the usual basket of major currencies EUR, AUD, GBP, CHF, are bearish to the USD except for the JPY which remains defiant. The GBP fell from glory after touching the 1.30 mark, currently knee-jerking between 1.2990 – 1.3043.

Furthermore, with about 30 companies reporting on Q2 earnings including Abercrombie & Fitch Co. (ANF), American Outdoor Brands Corp.( AOBC), and Spark Networks SE (LOV), to name a few, the stocks from these firms are likely, to continue  boosting Wall Street as was the case on Tuesday and Wednesday and may lift the Asian and European share slightly unless their earnings report is very disappointing.

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Whats Up with Oil?

Wednesday’s have usually been dubbed Oil day since it is usually the day in which market participants, get insights into the US Crude oil inventories. Can Oil own the day? that remains to be seen as we plow through the pros and cons.?

In recent times Oil prices have been plagued by the US Increased production in Shale and fracking explorations, supply woes due to US-led sanctions on Venezuela, Iran couple with trade tariffs wars spiraling between the US and China, as well as between the US and its allies such as Canada and Mexico.

Although some long-term investors may be looking forward to Septembers OPEC Monthly Oil Market Report (MOMR) for clearer direction. The weekly crude oil inventories delivered by, The Energy Information Administration. (EIA), acts as a very significant assessment for some short-term intra-day trading trends.

This week the EIA is forecasting a drop of -0.686M this information generally would have set West Taxes Intermediary, WTI Crude Oil on a Bullish or hawkish trend. However, this is not what is happening currently as the USD, strengthen ahead of the daily deluge of economic reports to be released on, the US-Gross Domestic Product, and Trade reports, the prices of oil sagged as a stronger Dollar, makes it expensive for investors to purchase and hold the commodity.

Although WTI Oil Futures price was spotted around $68.87 bbl.  Which is about $2.44 from the previous week.  With Saudi Arabia dropping prices, China importing oil from Iran, what cautious traders could perhaps expect are knee-jerk reactions to the constant push and pull.

Analysts have noticed downtrends as low as $65bbl and highs near the $70bbl.  With the median range between $68.00-69.00

By the time of print 09:00. WTI was just warming up to rally up 0.07% at 68.58 in arrange of 68.36 – 68.65 with possible upside. The crude oil Inventories report is delivered together with Gasoline Inventories report and others which compliment each other. Hence for example, if there is a build up in the Crude oil Inventories but a draw in Gasoline Inventories Oil prices may still rise.

Meanwhile, EU shares begin to show signs of instability into a dovish corrective mood.

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The US-Canadian NAFTA Renegotiation & The Day’s Outlook

Tuesday, the market has been imbued with optimism following a positive renegotiation between the US and Mexico on the North Atlantic Free Trade Agreement. (NAFTA).

Although details are still obscured. China may find this as unfavorable for them. On the docket, today The US and Canada are to commence talks on reshaping  the NAFTA deal.

There are also some 32 companies reporting on the Q2 earnings. On Monday, it was cited that Best Buy, (BBY) will be reporting, however, this was in error an instead is due to report today at 08:00 EST.

Global Stocks: Global shares rose as Manufacturers and Industries warm up to the opportunities ahead. EU Shares were up nearly 14 days high.

  • Germany 30: Rose 0.07% at by 08:17 GMT ranging between 12,544.60 – 12,595.29
  • UK100: Surged 0.72%  by the time of print at 08:17 GMT. As the UK returns from its Summer Bank holidays, to trade from 7,618.50 – 7,638.74
  •  Italy 40: Has not been faring well lately due to the ongoing Political reshuffling and approval. Italy 40 was 0.74% down sliding from 20,825.00- 20,530.00. The Italian Business Confidence fell below expectation to 104.2 vs the expectation of 106.2
  • France 40: Rose cautiously as the French Consumer Confidence report comes out in line with expectation at 97. The Stocks were seen up 0.15% trending from 5,477.35 – 5,491.65.

Currencies:

  • The US –Mexico talks bolstered the USD, momentarily. However, by Europe’s open the DXY had dropped 0.12% against a basket of major currencies. Ranging from 94.91- 94.64. Allowing the MXN to rally in tandem
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  • EUR/USD tacked on gains to trade between 1.1663 – 1.1700 up 0.18%  ahead of the deluge of economic reports to be released today. Some analysts are under the assumption that these report may for below expectations.
  • USD/JPY was trading between 111.01 – 111.36 indecisively, between gains and losses. As traders monitor the strength of the USD in the face of changing trade agreements and sanctions.
  • GBP/USD amidst the uncertainties around the Brexit Deal or no deal saga, the pair was seen initially as dovish. However, comments from PM Theresa May and UK Trade Minister Liam Fox suggest the UK is not afraid to walk away in case of a no deal outcome. The statements bolstered risk appetite, with the pair breaching the 1.29 physiological mark into bullish territory. Ranging from 1.2862 – 1.2910 and Governor of the BOE, Mr. Mark Carney been asked to remain at the helm for another year.

Commodities:  

  • WTI Oil prices have been trading sideways, in a range of 68.67 – 69.15 as supply concerns and sanctions cloud the short–term view. The US-Mexico meeting on NAFTA made the USD stronger and Oil expensive. Analysts suggest that ahead of today API Oil stockpiles the could be a likely abrupt surge before correction.
  • Gold Spot was trading indecisively between, 1,214.40 – 1,220.70, as Investors were split between riskier assets and safe havens monitoring developments of the US Canadian NAFTA talks.
  • XAU/USD: In the mean-time remains hawkish oscillating from 1,208.15 – 1,214.35

Cryptocurrencies:

As per our post on Monday the bullish trend of the cryptocurrencies continues almost all top 100 tokens tacking on gains BTC/USD seems poised to reach the 7k resistance levels. Currently, the pair is seen up 3.42% trading between 6,700.0 – 6,963.0 with more uptrends expected.

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US-Mexico NAFTA & Previous weeks Effects

In a Summation of the past 12 days, Analysts have observed that Traders and Investors have had ample opportunities to invest and trade in this capricious market environment in recent days. The Market rides on the sentimental response from trade tensions, Brexit woes, socio-political events and the announcement of various Q2 earning reports. Although at times the market is clouded with a lot of noise adherence to the basics is beneficial always as emotions are kept at bay. Today on the Docket are NAFTA talks between US-Mexico. Earning reports from Best Buy and some 13 other entities to release their reports are likely to boost the US Stocks US 30 and Nasdaq are expected to be on a Bullish trend.

Global Stocks: Global Shares roller-coasters with the plight of the Turkish Lira. However, stabilize with optimism and ease in trade tension pushing global stocks into a hawkish correction.

  • Germany 30: Today, rose for the first time in 12 days touching the 12,500 threshold however, struggles to find support there. Meanwhile registering a rally of 0.70% by midday in a range of 12,427.80 – 12,500.71
  • UK100:  was supported surging some 0.18% to 7,577.49 post midday oscillating between  7,557.67 – 7,587.19 despite the fact that the UK market closed for Summer Bank Holidays.
  • Italy 40: Has not been shining well lately and today remains in a dovish territory. Down 0.31% trending from 20,790.00-20,560.00. Hit by the political ironing out in Italy to which both the 5-star movement and the League Party are in wait for the Presidential approval of their proposed Prime Minister.
  • France 40: Climbed 0.64% to 5,467.17 as trade tensions cool off a bit.

Currencies:

The USD lost some of its lusters on Friday following Fed Chair Jerome Powell’s speech on the future of rate hikes and the current position of the USD. Allowing a basket of major currencies to rally against the USD, The EUR for example which dropped to the 1.13 mark rose to 1.16 before sliding early this morning as the USD stabilized. However, today’s economic events in Germany i.e. The German Business Expectations, Germany Ifo Business Climate Index and German Current Assessment render optimism and support for the EUR resurging against the USD. Although bearish to the CHF, GBP, JPY to name a few.

  • EUR/USD was caught up 0.25%  in a range of 1.1595 – 1.1654 to the upside.
  • USD/JPY The USD effectively bowed to the JPY losing steam at 0.29% trending down from 111.48-110.52.
  • AUD/USD  The pair were struggling in earlier EU trading hours however quickly rose by 0.08%  between 0.7308 – 0.7345.
  • GBP/USD spreads its wings in the sun climbing modestly by 0.28% yet remains vulnerable on Brexit talks. Ranging from1.2829 – 1.2887 and yet unable to break the 1.29 threshold.

 Commodities:

Commodities have been mixed also driven by the behavior or reaction to the USD. With the Feds signaling a possible hold on upcoming US rate hike in September, Traders and investors may opt for some short-term profit-taking. Giving way for the Commodities to climb. Meanwhile, this has not fully manifested.

  • XAU/USD:  rose some 0.12% to range  between  1,203.23 – 1,208.02.
  • The Gold Spot lagged in rallying, however, was found up 0.04% by 13:56 GMT
  • Oil prices remain murky, with stuck in a range of 68.34 – 68.94 after surging close to the $70 bbl mark, 69.16 to exact on the 24th of August then plummeted to $68bbl Oil supply and sanctions weigh. China continues to buy Iranian oil despite the US caveat.

Cryptocurrencies;

The Crypto seem highly elevated starting the week on a positive note most of the tokens were bullish or heading in that direction. Although BTC/USD were up trending between 6,631.3 – 6,769.9 Volatility and corrections are expected by the end of today’s trading day.

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