Axi | May 23, 2018 10:07
Originally published by AxiTrader h2 Market Summary (7.48 am Wednesday, May 23) /h2
If it really was the case that the US-China trade talks were driving the market or that expectations about North Korea were top of mind we would have seen the S&P 500 higher over the past week or so and we’d see it much lower this morning. I say that after the reaction, or lack thereof, to the news from President Trump – meeting with the South Korean President Moon Jae-in overnight – that the June 12 summit with the DPRK “may not work out”.
That, and news there is no deal on Chinese firm ZTE (HK:0763) and the President is still unhappy with the China trade talks should have knocked the market for six overnight. If that’s really what the driver is and not just what the headline writers say.
Anyway, the lack of reaction in stocks, with the S&P 500 down just 0.3% to 2,724, in the US dollar, with the DXY at 93.59 and the euro at 1.1780, or in bond markets, where the 10-year rate sits at 3.06% suggests traders have bigger fish to fry than the ebb and flow of the President’s moods, tweets, and outlook for trade and North Korea.
Today, anyway. It could be different tomorrow.
In other headlines there was a curious lack of reaction to news OPEC might increase production after its meeting in June to cover the shortfalls emerging from both Iran and Venezuela. The second WTI contract – the first one rolled off last night – is down 0.44% to $72.03 while Brent is still up by 0.2% at $79.37.
It was also an interesting night of central bankers across the globe Fed speakers continued to signal that rates are on the rise as did their counterparts from the BoE. In particular, BoE governor Mark Carney gave a clear impression that rates will rise but neither swiftly or soon.
So in the end forex traders, who had been selling dollars aggressively from early Europe, gave back the dollar's loses to leave most pairs largely unchanged. The Aussie dollar is at 0.7574 down a little more than 0.1% after a failed break above 76 cents which saw it top out around 0.7605. Likewise sterling is well off its highs at 1.3431, roughly unchanged while the US dollar gain around 0.2%-0.25% against the kiwi and Canadian dollar which are trading at 0.6932 and 1.2812 respectively.
USD/JPY is back under 111 at 110.90. That’s off a high near 111.20 yesterday and 111.40 the day before. Watch stocks and the yen folks.
And speaking of stocks it was an appalling day on the local bourse here in Australia yesterday. The collapse in price on the back of further woes at the banks and a pullback from the nose bleed levels miners have ascended to recently saw the S&P/ASX 200 close at 6041.90. That’s below the trendline from the recent rally. Overnight the SPI dipped another 4 points to 6,043.
With the S&P’s fall, a Dow 0.7% lower at 24,834, the Nasdaq 0.2% lower at 6,893 and Asia off yesterday it could be another difficult day for the ASX. Yesterday’s lows must hold or the technical suggest another 60-80 points of space till support.
In other commodities copper bounced again gaining another 0.8% to $3.11 a pound. Gold is still becalmed at $1291 and holding trendline and Fibonacci support $10-15 lower.
On the day today we get a speech by RBA governor Phil Lowe titled “Australia's Deepening Economic Relationship with China: Opportunities and Risks”. That’s at 6.05pm tonight. We also see “flash” PMI’s for Japan, Europe, and the USA as well as inflation data in Britain, home sales in the US and then – at 4am tomorrow morning – the Fed releases the Minutes from the last FOMC meeting.
h2 Here's What I Picked Up (with a little more detail and a few charts)/h2 h2 International/h2
h2 Forex/h2
h2 Commodities/h2
Have a great day's trading.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.