06 Dec 2018

FOREX Newsletter

FOREX Newsletter

December 06, 2018

 

Pulse of the Market

·      Resurgent fears over the U.S-China trade war sapped demand for riskier assets

·      The Pound remained on the back foot as debate on the government’s Brexit plan continued

·      The Canadian dollar weakened to one-and-a-half-year low against its U.S counterpart

·      Australia’s Q/Q growth fell to 0.3% while domestic demand came in weak

The Dollar was little changed against a currency basket yesterday as resurgent fears over the U.S-China trade war sapped demand for riskier assets, while the pound remained on the back foot as a parliamentary debate on the government’s Brexit plan continued. Wall Street slumped on Tuesday after a series of tweets by U.S President Donald Trump dented investor confidence that a full resolution to the U.S.-China trade conflict will be reached during a 90-day trade truce. Trump threatened to impose higher tariffs on China soon unless they make concessions, exacerbating fears over the outlook for global growth. Worries about U.S bond markets signaling an impending recession also weighed on market sentiment. The U.S dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 96.93. Trading volumes were low, with U.S markets closed for a national day of mourning for President George H. W. Bush. Major currencies retraced some of Tuesday’s action today, as investors processed President Donald Trump’s latest comments on China trade. Meanwhile, the Canadian dollar dropped to a six-month low versus its U.S rival, following a Bank of Canada policy update. While it was expected for the BOC to keep its benchmark interest rates unchanged — with the overnight rate at 1.75% — the central bank’s comments on an anticipated loss of economic momentum in the fourth quarter, as well as weaker oil prices threw the Canadian dollar also referred to colloquially as the loonie, into a tailspin. Reduced business investment on the back of trade tensions over the summer, impacted the outlook for the last three months of the year, the BOC said. U.S-China trade relations remained front and center today after tweets by President Donald Trump on Tuesday caused some turbulence. The Australian dollar fell significantly, after recent ABS figures revealed Australia’s Gross Domestic Product slowed in September, missing expectations.

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
00:30 Australia Trade Balance (OCT) Medium   A$3000m A$3017m
07:00 German Factory Orders n.s.a. (YoY) (OCT) Medium   -3.1% -2.2%
12:30 U.S Challenger Job Cuts (YoY) (NOV) Low     153.6%
13:15 U.S ADP Employment Change (NOV) Medium   195k 227k
13:30 U.S Trade Balance (OCT) Medium   -$55.0b -$54.0b
13:30 U.S Initial Jobless Claims (DEC 1) Medium   225k 234k
13:30 U.S Continuing Claims (NOV 24) Medium   1695k 1710k
15:00 Canada Ivey Purchasing Managers Index s.a. (NOV) Low     61.8
15:00 U.S ISM Non-Manufacturing/Services Composite (NOV) High   59 60.3
15:00 U.S Factory Orders (OCT) Medium   -2.0% 0.7%
15:00 U.S Durable Goods Orders (OCT) Medium   -2.4% -4.4%
16:00 DOE U.S. Crude Oil Inventories (NOV 30) Medium     3577k
23:30 Japan Overall Household Spending (YoY) (OCT) Medium   1.1% -1.6%
23:45 U.S Powell Gives Brief Welcome Remarks at Housing Conference High      

Euro

The single currency ended the day almost unchanged after falling earlier in the session. The EU commission presented its plan to reduce the dollar’s overwhelming dominance of the global economy and to strengthen the role of the euro, particularly for energy transactions. European capitals are increasingly frustrated with the global dominance of the dollar. Overall, the EUR/USD traded with a low of 1.1309 and a high of 1.1359 before closing the day around 1.1343 in the New York session.

 

Yen

The Japanese Yen lost ground yesterday. There were no data indicators in Japan or the U.S. Today, the focus will be on employment data will be in focus, with the release of ADP nonfarm payrolls and unemployment claims. We’ll also get a look at ISM Non-Manufacturing PMI. Japan will release household spending and average cash earnings. Overall, the USD/JPY traded with a low of 112.96 and a high of 113.22 before closing the day around 113.17 in the U.S session.

 

British Pound

The British Pound rose against the Dollar and the euro yesterday as traders priced in an increased chance of the UK staying in the EU following a disastrous day for the prime minister. An unprecedented string of three defeats for the government and a key decision on Brexit from Europe’s top court sent sterling up. Overall, the GBP/USD traded with a low of 1.2670 and a high of 1.2796 before closing the day at 1.2731 in the New York session.

 

Canadian Dollar

The Canadian Dollar weakened to one-and-a-half-year low against its U.S counterpart yesterday as investors slashed expectations for further interest rate hikes from the Bank of Canada after a dovish interest rate announcement from the central bank. The Bank of Canada kept its benchmark interest rate on hold at 1.75 per cent. Overall, USD/CAD traded with a low of 1.3250 and a high of 1.3397 before closing the day at 1.3352 in the New York session.

 

Australian Dollar

The Australian Dollar fell significantly, after recent ABS figures revealed Australia’s Gross Domestic Product slowed in September, missing expectations. Q/Q growth fell to 0.3%, and was expected to come in at 0.6%, while domestic demand came in weak. The Australian dollar against the greenback crashed upon the news. Overall, AUD/USD traded with a low of 0.7258 and a high of 0.7354 before closing the day at 0.7273 in the New York session.

 

Euro-Yen

EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The Relative Strength Index is above 47 and lies below the neutral zone. In general, the pair has gained 0.38%.

 

Sterling-Yen

Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 43 reading and lies below the neutral zone. On the whole, the pair has gained 0.51%.

  

Aussie-Yen

Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is indicating a bullish stance. The Relative Strength Index is above 52 reading and lies above the neutral region. In general, the pair has lost 0.58%.

  

Euro-Sterling

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 56 and lies above the neutral region. On the whole, the pair has lost 0.10%.

  

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The Relative Strength Index is above 40 and lies below the neutral region. In general, the pair has gained 0.16%.

 

Appendix

  

FOREX Closing Prices for December 05, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.1341 1.13599 1.13095 1.13432 0.0002
USD/JPY 112.75 113.223 112.963 113.175 0.4150
GBP/USD 1.27151 1.27964 1.26703 1.27317 0.0017
USD/CHF 0.99718 1.00066 0.99686 0.99752 0.0003
USD/CAD 1.32612 1.3397 1.32504 1.33527 0.0093
EUR/JPY 127.887 128.468 127.766 128.393 0.4850
GBP/JPY 143.385 144.515 143.244 144.109 0.7280
CHF/JPY 113.037 113.469 112.915 113.422 0.3860
AUD/JPY 82.72 82.961 82.14 82.241 -0.4830
EUR/GBP 0.8921 0.893 0.88728 0.89077 -0.0009
EUR/CHF 1.13108 1.1329 1.13092 1.13162 0.0004
GBP/CHF 1.26791 1.27601 1.26702 1.27016 0.0020

 

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1265 1.1287 1.1315 1.1338 1.1366 1.1388 1.1416
USD/JPY 112.76 112.86 113.02 113.12 113.28 113.38 113.54
GBP/USD 1.2543 1.2607 1.2669 1.2733 1.2795 1.2859 1.2921
USD/CHF 0.9922 0.9945 0.9960 0.9983 0.9998 1.0021 1.0036
USD/CAD 1.3123 1.3187 1.3270 1.3333 1.3416 1.3480 1.3563
EUR/JPY 127.25 127.51 127.95 128.21 128.65 128.91 129.35
GBP/JPY 142.13 142.69 143.40 143.96 144.67 145.23 145.94
CHF/JPY 112.51 112.71 113.07 113.27 113.62 113.82 114.18
AUD/JPY 81.11 81.63 81.93 82.45 82.75 83.27 83.58
EUR/GBP 0.8820 0.8846 0.8877 0.8904 0.8934 0.8961 0.8991
EUR/CHF 1.1287 1.1298 1.1307 1.1318 1.1327 1.1338 1.1347
GBP/CHF 1.2571 1.2621 1.2661 1.2711 1.2751 1.2801 1.2841

 

Sources:  News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)

 

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.

 

 

06 Dec 2018

Daily Market View

Daily Market View

Thursday, December 06, 2018
          U.S Stock Market

 

DJIA S & P 500 NASDAQ
25156 2717.75 6848.25
+0.10% +0.24% +0.40%

U.S stock futures closed higher yesterday, pointing to a slight rebound from the steep losses seen in regular trading. Dow Jones Industrial Average futures climbed 110 points, indicating a gain of 113.93 points. S&P 500 and NASDAQ 100 futures also pointed to slight gains. U.S stock futures closed earlier on Tuesday out of respect for former President George H.W. Bush’s funeral. The U.S stock market was also closed yesterday. The Dow Jones Industrial Average plunged 799.36 points on Tuesday, while the S&P 500 dropped more than 3 percent. The NASDAQA, meanwhile, fell 3.8 percent to close in correction territory. The yield on the three-year Treasury note surpassed its five-year counterpart on Monday. When a so-called yield curve inversion happens — short-term yields trading above longer-term rates — a recession could follow, though it is often years away after the signal triggers. Stocks began falling to their lows of the day after Jeffrey Gundlach, CEO of Doubleline Capital, told Reuters this inversion signals that the economy “is poised to weaken.”

 

 

Major Economic Releases for Today
Period Event GMT Forecast Previous

nov

U.S Challenger Job Cuts (YoY) 12:30   153.6%

oct

U.S Trade Balance 13:30 -$55.0b -$54.0b

dec

U.S Initial Jobless Claims 13:30 225k 234k

nov

U.S Continuing Claims 13:30 1695k 1710k

nov

U.S ISM Non-Manufacturing/Services Composite 15:00 59 60.3

oct

U.S Factory Orders 15:00 -2.0% 0.7%

oct

U.S Durable Goods Orders 15:00 -2.4% -4.4%

nov

DOE U.S. Crude Oil Inventories 16:00   3577k

 

U.S Powell Gives Brief Welcome Remarks at Housing Conference 23:45    
Dow Jones Industrial Average

Dow Jones futures fell earlier in the session, after the arrest of the CFO of Chinese telecom gear giant Huawei. Canada’s arrest, at the behest of the U.S, enraged China. Investors can find parallels to the current choppy stock market rally from this past spring and summer. But there are key differences that aren’t encouraging. Long-term support lines are acting as resistance. Stock market rallies are short-lived, while the stock market struggles to make higher highs. Apple and FANG stocks Facebook, Amazon.com, Netflix and Google parent Alphabet are all in worse shape than earlier this year.

 

NASDAQ 100

The tech-heavy NASDAQ index fell nearly 4 percent on Tuesday, with tech stocks like Apple, Amazon, Alphabet and Facebook weighing most heavily. The losses extend pain periods for Apple, which has seen downturn in recent weeks, and Facebook, which is suffering a down year on the heels of several scandals.

Oil

Oil prices edged higher yesterday as global investors’ awaited clarity on a possible, but far-from-assured, output cut by major producers gathering in Vienna. The Joint OPEC-Non-OPEC Ministerial Monitoring Committee, or JMMC, which includes the Organization of the Petroleum Exporting Countries member Saudi Arabia and nonmember Russia, met yesterday. It recommended a production cut from the September-October output levels, Oman’s oil minister told reporters, according to Dow Jones. The minister also said Russia agreed on the need for an output cut. OPEC will hold its official meeting today, with another key meeting between the group’s members and nonmember allies to be held Friday. Saudi Arabia’s oil minister had cast fresh doubt on whether that production-cut agreement would be reached by OPEC, plus Russia and other producers, in Vienna today, the Wall Street Journal reported, citing news reports from the region. West Texas Intermediate crude for January delivery tacked on 15 cents, or 0.3%, at $53.40 a barrel on the New York Mercantile Exchange. The contract tumbled 22% in November, the biggest monthly fall since October 2008.

 

 

Precious and Base Metals

Gold prices edged lower yesterday, a day after hitting their highest level in more than five weeks, as comments from a Federal Reserve official kept alive the prospect of gradually rising U.S interest rates. Meanwhile, palladium hit a new record high of $1,263.44 an ounce, widening its premium over gold to around $25, helped by a sustained supply deficit and increased speculative interest. It was 2.1 percent higher at $1,259.05 per ounce. Spot gold was down 0.1 percent at $1,237.31 per ounce, after hitting its highest since Oct. 26 at $1,241.86 on Tuesday. U.S gold futures were down 0.3 percent at $1,243.20 per ounce. The U.S Federal Reserve talking about the gradual increase in rates is going against some of the expectations that have been building up recently. The U.S central bank has increased interest rates three times this year but concerns about weaker growth have stoked bets that the Fed will end its tightening campaign sooner than previously thought. However, New York Fed President John Williams on Tuesday said the Federal Reserve should expect to continue raising interest rates “over the next year or so” even while it pays close attention to possible risks highlighted by financial markets. The central bank is widely expected to raise rates at its policy meeting on Dec. 18-19 and investors are keeping a close eye on signals for the future path of interest rates next year. Higher interest rates increase the opportunity cost of holding non-yielding bullion. World stocks tumbled to one-week lows yesterday, as declines by long-dated U.S. bond yields and a renewal of trade concerns stoked fears of a downturn in the United States, the world’s biggest economy, and pressured the dollar. Gold prices have recovered about 7 percent from 19-month lows hit in mid-August. The momentum certainly appears to be with the bulls at the moment, especially if the dollar remains under pressure in the aftermath of the trade war truce. Spot silver was steady at$14.52 per ounce.

 

 

Traditional Agricultures

Soybeans inched lower, consolidating after multi-month highs this week as investors sought clues as to whether a truce between Washington and Beijing in their trade dispute would revive U.S soybean sales to China.

 

 

 

Futures Settlement Price Wednesday, December 05, 2018
Instrument Contract Open High Low Settlement Net Change
DJIA DJM18 25023 25188 25003 25156 110
S & P 500 SPM18 2699.5 2720.5 2698 2717.75 16
NASDAQ 100 NDM18 6795.5 6861.25 6791.75 6848.25 45.75
Hang Seng HSH18 26784 26942 26720 26759 -507
Nikkei 225 NKH18 21645 21975 21630 21880 -155
FTSE 100 FTH18 6965.5 6978 6908.5 6915 -25
Gold GCJ18 1243.8 1244.6 1238.75 1242.4 -1.2
Silver SIK18 1459.5 1461 1448 1456 -3
Copper HGK18 275.85 277.7 274.5 277.2 1.35
Crude Oil CLK18 52.56 54.4 52.12 52.89 0.33
Wheat WK18 521.25 521.75 513.25 517.5 -4.5
Soybeans SK18 909.75 916.25 908 913.25 2
Corn CK18 383 386.25 382.25 384 -0.25

 

 

Daily Swings  (The Pivot Levels)
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
DJM18 24858 24931 25043 25116 25228 25301 25413
SPM18 2681.17 2689.58 2703.67 2712.08 2726.17 2734.58 2748.67
NDM18 6736.75 6764.25 6806.25 6833.75 6875.75 6903.25 6945.25
HSH18 26450 26585 26672 26807 26894 27029 27116
NKH18 21337 21483 21682 21828 22027 22173 22372
FTH18 6820.17 6864.33 6889.67 6933.83 6959.17 7003.33 7028.67
GCJ18 1233.38 1236.07 1239.23 1241.92 1245.08 1247.77 1250.93
SIK18 1436.00 1442.00 1449.00 1455.00 1462.00 1468.00 1475.00
HGK18 272.03 273.27 275.23 276.47 278.43 279.67 281.63
CLK18 49.59 50.86 51.87 53.14 54.15 55.42 56.43
WK18 504.75 509.00 513.25 517.50 521.75 526.00 530.25
SK18 900.50 904.25 908.75 912.50 917.00 920.75 925.25
CK18 378.08 380.17 382.08 384.17 386.08 388.17 390.08

 

 Source: – News & Quotes (Courtesy:  Reuters)                                                                    

Disclaimer

This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.

The firm or its staff members may trade on their own account and may from time to time hold or act as market makers in investments mentioned in this document. Please note that the firm makes no warranty, expressed or implied, as to the accuracy or completeness of the information and opinions herein. All parties are advised to seek independent professional advice as to the suitability of any products and to their tax, accounting, legal or regulatory implications. City Credit Capital (UK) Ltd is authorized and regulated by the Financial Conduct Authority, reg 232015.