20 Dec 2018

Daily Market View

Daily Market View

Thursday, December 20, 2018
          U.S Stock Market

 

DJIA S & P 500 NASDAQ
23312 2504.75 6352.50
+0.95% +0.54% +0.93%

U.S stocks gained earlier in yesterday’s trading session before the outcome of a key policy announcement from the Federal Reserve. The Dow Jones Industrial Average advanced 193 points, or 0.8%, while the S&P 500 index rose 20 points, or 0.8%. The NASDAQ climbed 48 points, or 0.7%. Investors are expecting the Fed to help assuage brewing anxieties that have underpinned a recent bout of market tumult as the central bank’s interest-rate setting committee. Meanwhile, U.S Treasury Secretary Steven Mnuchin gave investors reason for optimism regarding U.S-China trade relations, when he said the U.S and China will meet in January to broker a trade-war truce, in an interview with Bloomberg News on Tuesday. Previously, the Trump administration hadn’t given a specific timetable for face-to-face negotiations. With volume so light this time of year, investors should brace for more volatility. Existing home sales rose 1.9%, to a seasonally adjusted annual rate of 5.32 million from October to November, according to the National Association of Realtors.

 

 

Major Economic Releases for Today
Period Event GMT Forecast Previous

dec

BOJ 10-Yr Yield Target     0.00%

dec

BOJ Rate Decision     -0.10%

nov

Australia Employment Change 00:30 20.0k 32.8k

nov

Australia Unemployment Rate 00:30 5.0% 5.0%

dec

Bank of England Bank Rate 12:00 0.75% 0.75%

dec

BOE Asset Purchase Target 12:00 435b 435b

dec

U.S Philadelphia Fed Business Outlook 13:30 15.5 12.9

dec

U.S Initial Jobless Claims 13:30 219k 206k

nov

Japan National Consumer Price Index (YoY) 23:30 0.8% 1.4%
Dow Jones Industrial Average

The Dow Jones Industrial Average lost 1.49% to hit a new 52-week low. The best performers of the session were Verizon Communications Inc., which rose 0.38% or 0.21 points to trade at 55.86 at the close. Meanwhile, The Travelers Companies Inc. fell 0.12% or 0.14 points to end at 119.16 and International Business Machines was down 0.19% or 0.22 points to 116.43 in late trade. The worst performers of the session were Intel Corporation, which fell 4.55% or 2.17 points to trade at 45.57 at the close. Apple Inc. declined 3.12% or 5.18 points to end at 160.89 and Nike Inc. was down 3.06% or 2.18 points to 68.97.

NASDAQ 100

The NASDAQ index declined 2.17%. The top performers on the NASDAQ were Marin Software Inc. which rose 78.76% to 6.650, China Automotive Systems Inc. which was up 42.06% to settle at 3.040 and Evine Live Inc. which gained 41.85% to close at 0.558. The worst performers were Surface Oncology Inc. which was down 47.50% to 3.89 in late trade, Biocept Inc. which lost 29.82% to settle at 0.800 and Toughbuilt Industries Inc. which was down 24.00% to 1.14 at the close.

Oil

Oil prices rose about 3 percent yesterday, recovering somewhat from a sharp sell-off during the previous session, after U.S data showed strong demand for refined products. Sentiment remains negative, however, as investors grapple with weakening demand and worries about oversupply. U.S light crude contract rose $1.44 a barrel to $48.04. The markets slumped on Tuesday, extending a recent run of poor performance. Global benchmark Brent tumbled 5.6 percent on Tuesday, just above a 14-month low reached during the session, while WTI lost 7.3 percent, falling to its lowest level since August 2017. Crude inventories fell by 497,000 barrels in the week to Dec. 14, smaller than the decrease of 2.4 million barrels analysts had expected. The decline was the third consecutive decrease, the U.S Energy Information Administration said. The OPEC and other oil producers including Russia agreed this month to curb output by 1.2 million barrels per day (bpd) in an attempt to drain tanks and boost prices.

 

 

Precious and Base Metals

Gold rose to a one-week high yesterday, helped by a weaker U.S dollar and a fall in global stock markets, but moves were limited as investors sought clarity on the path of U.S interest rates as concerns about a slowing global economy deepened. Spot gold was up 0.1 percent at $1,247.06 per ounce, having earlier touched its highest since Dec. 10 at $1,250.27, just short of a five-month peak of $1,250.55 hit last week. U.S gold futures were steady at $1,251.30 per ounce. There has been a slight increase in the minority view that the Fed might not raise rates, given the recent weakness in the equity markets. It would be quite a shock if they didn’t increase rates in this week’s meeting. Most of the attention will be on how many more interest rates rises there may be next year. The Fed is widely expected to raise interest rates for the fourth time this year at its two-day policy meeting ending today. But weak stock markets and slowing global growth may prompt the central bank to signal a slowdown in rate increases. We have seen quite a broad-based sell-off across many other markets, from equities to other commodity markets, and an increase in risk aversion. In that climate, gold is edging gradually higher towards a multi-months peak. World stock markets tumbled as fears about a slowing global economy gripped investors, while the dollar index slipped 0.3 percent against a basket of major currencies. Gold tends to gain when interest rate hike expectations ease because lower rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, in which it is priced. In euro terms, gold reached its highest since June at 1,100.57 euro an ounce. Gold, considered a safe investment during times of financial, economic and geopolitical uncertainty, has risen more than 7 percent from 19-month lows hit in mid-August. It is also set to post its biggest quarterly gains since March 2017. Among other precious metals, silver was down 0.2 percent to $14.63.

 

Traditional Agricultures

Soybean futures edged higher yesterday as the oilseed market awaited signs of further demand from China as part of a trade truce with Washington. Wheat eased after gaining ground on Monday while corn ticked upwards in cautious trading.

 

 

 

Futures Settlement Price Wednesday, December 19, 2018
Instrument Contract Open High Low Settlement Net Change
DJIA DJM18 23571 24073 23168 23312 -282
S & P 500 SPM18 2531.75 2590.25 2489.5 2504.75 -32.25
NASDAQ 100 NDM18 6464 6601.5 6301 6352.5 -127.25
Hang Seng HSH18 25847 25935 25798 25919 103
Nikkei 225 NKH18 20985 21100 20805 20935 -170
FTSE 100 FTH18 6639 6723.5 6598 6613.5 -17
Gold GCJ18 1253.6 1261.9 1245.1 1246.4 -6.7
Silver SIK18 1470 1489 1460.5 1465 -4
Copper HGK18 265.45 271.9 265.4 267.5 2.3
Crude Oil CLK18 46.27 48.32 46.26 47.38 1.17
Wheat WK18 531.75 532 521.25 522.5 -9.75
Soybeans SK18 906.5 909.5 898.75 899.5 -7.75
Corn CK18 384.75 384.75 381.5 381.5 -3.5

 

 

Daily Swings  (The Pivot Levels)
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
DJM18 22057 22613 22962 23518 23867 24423 24772
SPM18 2365.33 2427.42 2466.08 2528.17 2566.83 2628.92 2667.58
NDM18 5934.67 6117.83 6235.17 6418.33 6535.67 6718.83 6836.17
HSH18 25696 25747 25833 25884 25970 26021 26107
NKH18 20498 20652 20793 20947 21088 21242 21383
FTH18 6441.00 6519.50 6566.50 6645.00 6692.00 6770.50 6817.50
GCJ18 1223.57 1234.33 1240.37 1251.13 1257.17 1267.93 1273.97
SIK18 1425.50 1443.00 1454.00 1471.50 1482.50 1500.00 1511.00
HGK18 258.13 261.77 264.63 268.27 271.13 274.77 277.63
CLK18 44.26 45.26 46.32 47.32 48.38 49.38 50.44
WK18 507.75 514.50 518.50 525.25 529.25 536.00 540.00
SK18 884.92 891.83 895.67 902.58 906.42 913.33 917.17
CK18 377.17 379.33 380.42 382.58 383.67 385.83 386.92

 

 

 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.

 

 

 

 

 

 

20 Dec 2018

FOREX Newsletter

FOREX Newsletter

December 20, 2018

 

Pulse of the Market

·      U.S central bank hiked interest rates by 25 basis points and forecast fewer rate increases next year

·      The focus for Yen traders will be on the Bank of Japan’s rates decision later in the day

·      Italy had struck a deal with the European Commission over its contested 2019 budget

·      Sterling is trading off its lows ahead of the UK central bank’s final policy meeting of the year

 

The Dollar rallied after a Federal Reserve rate hike but yesterday’s gains were unexpected for a few reasons. First, most investors were looking for Fed Chair Powell to be dovish and when he lined his comments with optimism, the dollar rose. Secondly, the dollar rallied despite the fact that 10-year Treasury yields dropped to an 8 month low. Rate hike expectations also declined with the market now pricing in a greater chance of a rate cut than a rate hike in 2020. All of this combined with downgraded GDP and inflation forecasts should have driven the greenback lower but instead, the dollar rallied because the tweaks to the policy statement weren’t dovish enough. Investors had braced for the worst – from no rate hike to dissents and a change in the risk assessment. And while there were subtle tweaks in the statement and lowered growth and inflation forecast, these changes were not as significant as the market had hoped. The same was true of Fed Chair Powell’s comments – he made it clear that nothing is predetermined and everything is data dependent but he also said the sharp decline in US equities and the tightening of financial market conditions has not fundamentally altered their outlook. The Fed still plans to raise interest rates next year and most policymakers expect the economy to grow.  Next up is the Bank of England. Sterling is trading off its lows ahead of the UK central bank’s final policy meeting of the year. Unlike the Fed, there will be no changes to interest rates. The last time the BoE met, they sent GBP/USD soaring above 1.30 on the talk of rate hikes. According to the summary of the report that month the MPC said “Were the economy to continue to develop broadly in line with the November Inflation Report projections, an ongoing tightening of monetary policy over the forecast period would be appropriate.” To add to that Governor Carney said a Brexit deal could release pent up investment demand but a no-deal Brexit could also lead to a major supply shock that could drive up inflation and interest rates. Fast forward 7 weeks and the UK is no closer to a Brexit deal.

 

 

Time(GMT)   Economic Release IMP Actual Forecast Prior
  BOJ Rate Decision (DEC 20) High     -0.10%
00:30 Australia Employment Change (NOV) High   20.0k 32.8k
00:30 Australia Unemployment Rate (NOV) High   5.0% 5.0%
06:00 Japan Machine Tool Orders (YoY) (NOV) Low     -16.8%
09:30 U.K Retail Sales Ex Auto Fuel (YoY) (NOV) Medium   2.3% 2.7%
12:00 Bank of England Bank Rate (DEC 20) High   0.75% 0.75%
12:00 BOE Asset Purchase Target (DEC) High   435b 435b
13:30 U.S Philadelphia Fed Business Outlook (DEC) Medium   15.5 12.9
13:30 U.S Initial Jobless Claims (DEC 15) Medium   219k 206k
13:30 U.S Continuing Claims (DEC 8) Medium   1665k 1661k
15:00 U.S Leading Index (NOV) Medium   0.1% 0.1%
21:00 New Zealand ANZ Consumer Confidence (MoM) (DEC) Low     2.8%
23:30 Japan National Consumer Price Index (YoY) (NOV) High   0.8% 1.4%

Euro

The single currency notched up its biggest daily rise against the Dollar and the Pound in more than a week yesterday as diminishing political worries in Italy and strong trade data contrasted with growing concerns about Britain’s plans to avoid a “no-deal” Brexit. Trade data this week showed European exports rose by more than 11 percent in October. Overall, the EUR/USD traded with a low of 1.1360 and a high of 1.1438 before closing the day around 1.1375 in the New York session.

 

Yen

The Japanese Yen rally continues to climb this week. Earlier in the day, the pair dropped to its lowest level since late October. On the release front, Japan’s trade deficit widened for a fourth straight week, ballooning to 0.49 trillion yen, much higher than the previous month’s deficit of 0.30 trillion. The estimate stood at 0.31 trillion yen. Overall, the USD/JPY traded with a low of 112.06 and a high of 112.64 before closing the day around 112.46 in the U.S session.

 

British Pound

The British Pound declined against its major counterparts earlier in the session after a data showed that UK consumer price inflation slowed to its lowest level in twenty months in November amid lower oil prices. But Sterling manage to reverse its losses and closed the session higher against the U.S Dollar. Overall, the GBP/USD traded with a low of 1.2605 and a high of 1.2677 before closing the day at 1.2609 in the New York session.

 

Canadian Dollar

The Canadian Dollar edged higher as oil prices and stocks rose, but the currency pared gains after domestic inflation data supported bets for the BOC to stay sidelined over the coming months. Lower gas prices pulled Canada’s annual inflation rate in November down to 1.7 per cent, the first time in 10 months it has been below the 2.0 per cent target. Overall, USD/CAD traded with a low of 1.3411 and a high of 1.3504 before closing the day at 1.3480 in the New York session.

 

Australian Dollar

The Australian Dollar remained under pressure, losing ground against most of the major crosses yesterday despite continued U.S Dollar weakness. There was little reaction to a speech from Chinese President Xi Jinping that failed to outline any specific measures to help support the Chinese economy. Instead, short-covering ahead of Fed interest rate decision was the likely catalyst. Overall, AUD/USD traded with a low of 0.7168 and a high of 0.7199 before closing the day at 0.7170 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 46 and lies below the neutral zone. In general, the pair has gained 0.11%.

 

Sterling-Yen

Currently, GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish tone and MACD is indicating a bearish stance. The Relative Strength Index is above 35 reading and lies below the neutral zone. On the whole, the pair has lost 0.27%.

 

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 also indicating a bearish stance. The Relative Strength Index is above 38 reading and lies below the neutral region. In general, the pair has lost 1.03%.

 

Euro-Sterling

This cross is currently trading above 14, 50 and below 100 days moving average. Fast stochastic is indicating a bearish tone and MACD is issuing a bullish signal. The Relative Strength Index is above 64 and lies above the neutral region. On the whole, the pair has gained 0.36%.

 

Sterling-Swiss

This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The Relative Strength Index is above 40 and lies below the neutral region. In general, the pair has lost 0.02%.

 

Appendix

  

FOREX Closing Prices for December 19, 2018
Currency Open High Low Close Net Chg
EUR/USD 1.13635 1.14387 1.13602 1.13753 0.0016
USD/JPY 112.501 112.646 112.069 112.46 -0.0480
GBP/USD 1.26421 1.26775 1.26051 1.26091 -0.0029
USD/CHF 0.9922 0.99545 0.99046 0.99436 0.0018
USD/CAD 1.34651 1.35042 1.34118 1.34803 0.0018
EUR/JPY 127.853 128.36 127.529 127.944 0.1360
GBP/JPY 142.235 142.512 141.557 141.819 -0.3780
CHF/JPY 113.348 113.397 112.84 113.064 -0.2540
AUD/JPY 80.729 80.98 79.536 79.917 -0.8340
EUR/GBP 0.89877 0.90397 0.8978 0.90197 0.0033
EUR/CHF 1.12778 1.13426 1.12753 1.13131 0.0036
GBP/CHF 1.25421 1.25751 1.25192 1.25421 -0.0003

  

 

Daily Pivot Points
  Trading Range  
Contract S3 S2 S1 Pivot R1 R2 R3
EUR/USD 1.1266 1.1313 1.1344 1.1391 1.1423 1.1470 1.1501
USD/JPY 111.56 111.81 112.14 112.39 112.71 112.97 113.29
GBP/USD 1.2511 1.2558 1.2584 1.2631 1.2656 1.2703 1.2728
USD/CHF 0.9864 0.9884 0.9914 0.9934 0.9964 0.9984 1.0014
USD/CAD 1.3334 1.3373 1.3427 1.3465 1.3519 1.3558 1.3611
EUR/JPY 126.70 127.11 127.53 127.94 128.36 128.78 129.19
GBP/JPY 140.46 141.01 141.41 141.96 142.37 142.92 143.32
CHF/JPY 112.25 112.54 112.80 113.10 113.36 113.66 113.92
AUD/JPY 77.86 78.70 79.31 80.14 80.75 81.59 82.20
EUR/GBP 0.8924 0.8951 0.8985 0.9012 0.9047 0.9074 0.9109
EUR/CHF 1.1211 1.1243 1.1278 1.1310 1.1345 1.1378 1.1413
GBP/CHF 1.2460 1.2490 1.2516 1.2545 1.2572 1.2601 1.2628

 

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.