This edition aims to sum up some of the factors driving or disrupting market trends. Prudent examination triggers confidence for those who care to pay attention and accords ‘Forward Guidance”, borrowing the phrase from Central Bankers.
Market participants have had their fair share of roller-coaster epic time framed in knee-jerking events, As The US brazenly flaunts America First Policies promised by US President Trump. The Trade US Trade Tariffs imposed on China, Canada, Mexico, and Germany is generating a lot of uncertainties heating up nerves for those not paying attention to details the lessons carry a heavy toll.
On the other front the Organization for Petroleum Exporting Countries and its allies like Russia, henceforth the be noted as OPEC+ championed the removable of surplus oil that was dragging Oil price down by cutting production quota down. The Same OPEC+ have been instrumental in restoring a limited increase cap of between 600,000-800,000bdp or as some sources suggest up to 1million barrels. move that was welcomed by investors as bullish.
Many technical analysts are now forced to implore strategies which combine fundamentals.
Ahead of a deluge of reports on the docket of the economic calendar abrupt surges and trough are likely to be seen in early EU trading hours. As investors await reports on the Italian Industrial production, UK GDP, UK Construction data and US PPI to name but a few. Diving straight into the Market let take a glance at the usual suspects.
Global Stocks:
Asian Stocks were left in a bearish state even though the sale of global bond slows down. Naturally, the EU shares were pressed down in tandem.
Germany30 Churning at 11,950.22 down 0.24% and in a range from 11,921.73 – 11,986.07.
Italy 40 was bearish 0.17% swinging from 20,010.00- 19,832.50. with inconclusive reports that the Italy government will not change it budgetary approach.
UK100 was also forced to cringe a bit down, 0.22% at 7,217.50 trending from 7,234.25-7.217.50.
US 30 was sliding between 26,521.0 – 26,424.0 down 0.10% at the time of print 0:7:52 GMT. However with earnings about 4 companies delivering their Q3 earnings
DXY is seen bullish in the range between 95.55 – 95.79 affirming USD ‘s resilience
Currencies: A basket of major currencies attempt a slight recovery against the already firm but parked dollar following President Trump’s comments that the Fed was racing with the hikes at a time when the USD was strong. Again an act is seen as meddling the Fed’s Mandate. Some investors saw this as a caveat or sign to buy into other currencies.
EUR/USD: Climbed to 1.1504 with a range path set between 1.1432-1.1530 upside movements are seen capped even should economic releases turn out to exceed market expectations.
GBP/USD: rallied to 13181 up 0.27% range bound between 1.1432-1.1530. The abrupt rally is seen unsupported and likely to fade bay before mid-day.
USD/JPY: With all the hype on the USD it managed to regain it crown against the JPY safe haven up 0.21% at 113.91 to trade from previous lows 112.93-113.22 upside trends are viewed with caution.
Commodities: The USD’s strength and the slow growth in Chinese factory productions weight on commodities.
XAU/USD Was down trotting as the USD flexes it muscle. The pair were seen 0.23% down at 1,187.10 likely to range 1,186.42 – 1,191.41
Oil: With hurricanes likely hitting the US coasts. Rigs have been closed due to safety concerns. Which puts pressure on prices Tuesday’s API report was shifted to today and not as reported in Tuesday’s blog post. Hence Crude Oil inventories are to be expected on Thursday due to the US Bond market closure on Monday for Columbus Day celebrations. The IMF’s cut in global growth did not help oil prices plummeting from 74.92-74.50 a 0.25% decline putting investors in a wait and see scenario.
Nickel: drops 0.58% to range from 13,015.00 -12,857.50
It should be noted however that Silver and Copper remain the odd ones out, standing tall at the moment upside movement does not seem to be sustained.
Silver: was up 0.07% at 14.410 rallying from 14.340 – 14.455
Copper: Spotted jumping in out of gains between 2.788 – 2.820
Cryptocurrencies: The only thing that could be said about the Cryptocurrencies is disappointing. Reports of widespread hacks keep eroding investors’ confidence and to allow room for a consistent rally. Although some savvy traders have managed to capture the momentum moves.
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The market is nothing but dull these days spiced by unresolved Sino-US Trade tensions, fears of a stronger USD which encourages a high possibility of another Fed rate hike which currently has about 81% of market participants priced in. Inconclusive Brexit jitters which are said to have of 40 MP’s rallying against PM Theresa May’s Brexit deal weighs on sentiment and clarity of future trends.
Today, however, as bond traders return from Columbus day celebrations, the US market is in full throttle.
Global Stocks:
Although Asian shares were seen bearish at 17 months’ lows, while EU shares recover slightly on rising Oil and banking stocks. Italian saga keeps a lid on upside movements.
Germany30 Was seen hopeful earlier at the time of print 08:42 GMT at 11,963.67 ranging between 11,948.55-11,972.83 upside movement may be restricted. A surge of up to 40pips may not be surprising neither a drop of up 60pips perhaps to 11,880.00.
Italy 40 By the time of print the shares were noted at 19,935.00 in a range from 19,630.00 – 19,965.00 and bullish, however, with the Italian budgetary weighing reversals of up to -0.80% or more may be prudently anticipated.
UK100 standing hawkish at 7,236.75 and oscillating between 7,235.00-7,246.34 and in search of support to continue surging or else expect a selloff.
US 30 felt trapped between 26,394.0 – 26,555.0 before the open bell. Perhaps wall street may get a break with some of the first earning season numbers. Although unlikely with US yields high. anything is possible as earnings season kicks in
Currencies:
EUR/USD: Could not rid itself of the albatross of the USD strength. Plummeting 0.45% from 1.1530 – 1.1436 perhaps dropping 20 pips by the end of the day, although technical indicators such as the RSI indicates it is at the support levels with possible upside reversals.
GBP/USD: Continues to be pressed down with a decline of 0.36% ranging from 1.3034-1.3106 at 1.3043 by the time of print.
USD/JPY: Although the dollar is up against a basket of major currencies. The JPY stood tall vs. the USD which shed 0.09% from 112.94 – 113.40 as some investors in Asia sort to hedge with the safe haven currency.
Commodities
XAU/USD Was seen sunbathing around 1,190.61 and to range from 1,187.94 -1,191.85 as investors sort to hedge, upside movement, is still seen capped as the USD retains its footing.
Oil: Reports of Iran exports decline as the US sanctions near implementation, coupled with possible production disruptions from Canada Saint John’s refinery supported prices, by the time of print Crude Oil WTI was up 0.69% trading from 74.19-74.80 further upside is seen ahead of the API Crude oil stockpiles.
Cryptocurrencies:
Meanwhile, some investors resorted to taking chances with the Cryptocurrencies. as rumors of a HongKongian investment firm is said to announce its backing of a Swiss bank to become perhaps one of the first cryptocurrency investment banks. BTC and several tokens were seen Hawkish.
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The week begins with a reflection on Friday’s disappointing NFP report which added only 134,000 new jobs as opposed to the expectation of 185,000. Investors were taking aback some resorting to hedging with the safe havens and taking advantage of the plight of the EUR and GBP.
The US market opens for business albeit Columbus day celebrations the US Bond market is to remain closed. Naturally, volatility is expected as market participants ponder on the impact of the NFP report. All other indicators point to the fact that the USD remains firm. US yields are up again undermining global stock and pinning down Emerging Market currencies.
Furthermore, the week marks the rollout of Q3 corporate earnings reports. With Major Banks like JP Morgan on the docket for Friday.
EVEN BOXING COULD IMPACT SHARES
Some savvy market participants have been looking at the impact of micro fundamentals i.e. localized events which drive or impedes on market trends e.g. Saturday’s boxing match in Las Vegas between the undisputed Champion Khabib aka the “Eagle” and MacGregor is reported to have grossed revenues with 7 figures.
Naturally, this could affect the earnings reports of companies and firms associated with the promoting and managing of the fight, similar to the impact that the super bowl has on the market. The logic is if the UFC 229 has risen from a value of $200 million to $ 4 billion it will definitely impact some stocks according to sources from Forbes.
Global Stocks:
For now, stocks are still lingering in a bearish mode as stated earlier. The surge in US yields plays a major role in this as well as the Italian budgetary situation, coupled with an ultimatum from the ECB cautioning EU banks to limit their dependency on the London stock exchange for booking trades and loans by 2022 this news up the heat on an already sweaty EU Market and means the Brexit’s finalization deadline is fast approaching. Canada is on holiday for Thanksgiving Day, Japan on Sports –Health Day and China returns from a week-long national day celebration.
Germany30 was in a downward spiral ranging between 12,070.64 and 12,032.35 by the time of print 08:35 GMT with the expectation of further downside possibly to 11,990 and beyond.
Italy 40 Fared no better plummeting 1.89% to trade 19,755.00 – 20,142.50 with further downside.
UK100 slide 0.88% dismal between 7,244.07 – 7,320.37.
US 30 was on a freefall from 26,540.0- 26,327.0 down 0.40%.
Currencies:
EUR/USD: On Friday the pair were bullish however having time to decipher the consequences, with the US yields up and a strong dollar, the EUR gave up gains, trading down dropping 0.34% in from 1.1530 –1.1460.
GBP/USD’s fate was subdued as Scotland peddles its own ideas of Scot-exit the pair was found down 0.31% between 1.3028 – 1.3133.
USD/JPY: The JPY has been resilient towards the USD send the dollar down almost 0.50% to trade in a range of 113.06 – 113.94.
Commodities
XAU/USD recedes by 1.36% into a range from 1,184.23 – 1,204.14
Oil: amid the uncertainties of future production ailing the global oil prices with some speculations of Brent oil hitting $100bbl news of explosions hitting Canada’s St. John’s refinery may affect prices adversely. for now WTI crude oil is bearish between 73.08 – 74.57. perhaps the strong USD weighs.
In other news, attention is shifting to the FAANG stocks, Facebook, Amazon, Apple, Netflix, and Google. since high yields may encourage the Fed to continue raising rates. which may tighten liquidity.
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Arriving at the end of another very active week coupled with the usual profit-taking and US jobs report (NFP). As the USD maintains its strong stance with slight downward corrections.
Global Stocks: Have not recovered from the bearish mode. As China enters into the 3rd day of National Day commemorations. Meanwhile, Asian shares linger, EU shares struggling for a comeback especially with German Factory orders and PPI surging beyond market expectations. The US stocks were hit hard Thursday, with US 30 dropping nearly 300 pips. The US Yields continue to be bullish Stocks are likely to suffer.
Germany30: By the time of print 0:739 GMT was treading close to the current support level of 12,233.50 a decline for 0.09% above the previous close of 12,244.14 ranging between (12,233.50-12,248.02) a drop of up to 0.60% or more would not be surprising before any corrections.
Italy 40was amongst the few bullish EU stocks, up 0.09% at the support line of 20,490.00 and looking at a range from (20,490.00-20,532.01) once again abrupt down trends pushing the shares down 0.60%-0.80% before consistent uptrends are seen should be factored in one’s analysis. As ongoing Budgetary woes weigh.
UK100 By the time of Print as noted earlier the shares were in a range between (7,405.50-7,420.01) at 12,406.25 a drop of 0.60% -0.80% could easily be incurred before any stable up trends are noted today.US 30 was seen at 26,627.48 between (26,471.61-26,793.82)
US30: was seen at 26,627.48 between (26,471.61-26,793.82)
Currencies:
EUR/USD: was seen attempting to climb, albeit caught in a range between 1.1496 – 1.1520 as investors seek to take profit in the short squeeze ahead of today’s NFP.
GBP/USD: gained some up winds rallying modestly 0.05% to range from 1.2984 – 1.3060, rumors of a Brexit deal with EU is giving as the primary basis.
USD/JPY: The USD lost some steam vs the JPY trading bearishly between 113.64 – 114.55 due to upbeat Japanese economic release earlier today and ahead of the NFP.
Commodities: Despite the USD apparent strength as the DXY records a rally of 0.14% at 95.89, commodities took on a defiant stance with most rallying.
XAU/USD: has not changed much ranging between 1,197.33 – 1,200.40 and continues to Jump in and out of losses.
Oil: Although WTI crude all is bullish the recent rally comes after a significant drop from 76.47 Thursday’s highs. Ahead of the Baker Hughes Rig Count Oil was seen up 0.27% in a range of (74.47 – 74.94).
Copper & Silver: plummet as most of China’s major industries are closed for holidays
Nickel: remains down trotting between (12,362.50 – 12,612.50) at 12,415.00 down 1.08%
Elsewhere Reserve Bank of India in a surprise decision left interest rates on changed at 6.50% disappointing market participants and sending the rupee slumping stating Calibrating tightening for the reason of their decision.
In the Technology arena, US accuses China of hacking some major firms in the USA by placing tiny chips in servers used by companies like Apple and Amazon to name a few. Facebook goes under the knife again down 2.20% in a range between (157.35 – 161.46) in Premarket
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With the US NFP on tap, following a better than expected ADP report on Wednesday the USD climbed further up as is evident in the DXY, US Dollar index which measures the strength of the USD vs other currencies, which rose by 0.20% to range between 95.87 – 96.12. When the USD becomes strong commodity prices usually falls as it becomes more expensive to acquire and hold onto them. Meanwhile, China is on its second day of National Day celebrations.
Global Stocks: It seems investors are set on capitalizing on the up trends of the USD shunning the Asian Market slightly. Asian Shares plummeted putting the EU shares in a bearish mood. Meanwhile, Wall Street does the rock-steady dance relatively stable for now but could open with lower. By the time of print 09:27 GMT,
Germany30: receded 0.39% to range between 12,278.55 – 12,177.30 on a bearish track.
Italy 40 plummeted by 0.63% oscillating between 20,525.00 – 20,715.00 in a nose dive.
UK100had the steepest decline of 0.90% on a dovish path between 7,436.29 – 7,493.75.
Commodities: Are currently at the mercy of the USD. Most were in bearish trend reversing from the brief surges they took on Wednesday morning.
XAU/USD: Has been jumping in and out of small gains which may not be sustained in a range of 1,196.07 – 1,201.05.
Oil: After racking up beyond the $76bbl on a built-in US inventory, soon recede to trade capriciously between 76.00 – 76.47 while OPEC and co. maintain its efforts to stabilize prices, some analysts have begun backtracking that Brent oil prices may not reach $100bbl after all as initially assumed.
Silver: Was also dovish in its outlook down 0.7% in a range of 14.590 – 14.675
Copper: prices also dropped 0.28 % to trade between 2.811 – 2.837
Currencies:
EUR/USD in early trading EU hours the EUR was seen crushed under the USD struggling between 1.1477-1.1463. however abrupt surges to 1.500 are highly possible
GBP/ USD. Was seen staging a small come back up 0.27% in a range from 1.2923 – 1.3053
USD/JPY The USD’s firmness has pinned the JPY down 0.22%. the pair was ranging between 114.22 – 114.55.
In other news, Facebook’s scrutiny before EU lawmakers led to a short sell off as uncertainties prevailed, however, with the verdict out being finalized it seems Facebook is ready to handle anything thrown at it. loyal and new clients continue to root for the company. While others search for opportunities to take advantage of the changing tides. FB shares were noted to have climbed 1.55% in a range of 159.53 – 163.66.
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