Axi | Jul 10, 2018 09:11
Originally published by AxiTrader h2 Market Summary (7.43am Tuesday, July 10)/h2
How do you like your eggs? Fried, poached, sunny side up, over easy, or maybe just scrambled.
I apologise for the breakfast metaphor but it’s the first thing I thought of this morning with the UK government in a bit of a funk over Brexit with Foreign Secretary Boris Johnson’s resignation raising the real chance of more turmoil and the possibility of a hard Brexit – something Theresa May herself warned of.
The messiness didn’t bother the FTSE, which closed London trade 0.92% higher at 7,687. But forex traders were not so sanguine, though it’s fair to say GBP/USD has had a wild ride over the past 24 hours. It’s traded through a 1.3189 to 1.3362 range with Johnson’s resignation knocking it sharply lower – it’s at 1.3246 as I write, down 0.35%.
That reversal in sterling maybe highlighted that the US under President Trump is a bastion of political stability, not to mention genuine economic strength. So the US dollar made gains across the board reversing most of the acute weakness it had shown earlier.
EUR/USD is at 1.1745 unchanged after trading through a 1.1732-1.1790 range – interesting little candle on the daily charts. USD/JPY leapt higher with the US dollar move and is at 110.83 now up 0.35%. The Aussie is at 0.7460 off the high of ~0.7482. Copper is higher by 1.5% which, along with the rally in Chinese stocks, helps the Aussie dollar. The kiwi is 0.12% higher at 0.6834 and the Canadian dollar is down 0.3% with USD/CAD at 1.3117.
To stocks now and every single equity index I follow on a daily basis is higher over the past 24 hours. Of course the irrepressible S&P/ASX 200 was higher again yesterday, gaining 13 points. And SPI traders have added another 24 points overnight in the wake of this globally ebullient mood in stock markets.
At the close the Dow is 320 points higher for a gain of 1.31% to 24,776. The Nasdaq is 0.93% higher at 7,274, and the S&P 500 posted a 0.88% rise to close at 2,784. Things weren’t quite as positive in Europe but still the DAX and CAC closed up around 0.4% while yesterday in Asia it was all green and Chinese stocks surged with the Shanghai Composite up 2.5% and the China A 50 index posting a more circumspect 0.66% gain.
To commodities and gold has been able to push up to $1265 overnight but it’s back at $1257 this morning with the US dollar a little firmer. Copper, as I noted above, had a bit of a bounce amid a mixed night for industrial commodities. The FT reports the big fall in copper might have been a position liquidation in China. Oil is a little higher as traders appear to focus on the reality that if Iranian oil comes off market and the Saudis fill the void then global capacity might be maxed out. Hard to be bearish right now. WTI is at $74.06 up 0.35% while Brent climbed a whopping 1.5% to $78.26.
US 10's are 2.86%, the 2's at 2.56% which means the curve is at 29.50. Bitcoin is up 2% at $6702. It still has to break up and through $7,100/50.
On the day today we get a couple of really important releases. Here in Australia it is the NAB business survey which will give us a window into just how the economy is tracking. It’s not just headline confidence or conditions. Look at trading, profitability, and employment sub-indexes as well. In China we get CPI and PPI data and then tonight in the UK we get manufacturing and industrial production along with the NIESR GDP estimate for Q2, while in Germany we see the release of ZEW survey. Nothing really of note in the US other than the JOLTS survey and API crude stocks tomorrow morning.
h2 Here's What I Picked Up (with a little more detail and a few charts)/h2 h2 International/h2worth noting the FT says , “The liquidation of a $1bn bet placed by a Chinese investor has roiled the copper market, triggering a violent sell-off that has seen the metal plunge to a 12-month low”. That liquidation was apparently the equivalent of $800 million of copper selling, or around 26,000 lots on the Shanghai futures exchange. That’s the equivalent of 130,000 tonnes of copper.
shared a tweet celebrating himself .
h2 Australia/h2
Have a great day's trading.
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