Axi | May 25, 2018 09:45
Originally published by AxiTrader h2 Market Summary (6.21 am Friday, May 25)/h2
It looks like we are back to fire and fury as the modus operandi for the White House again, after President Trump announced a new 25% car import tariff and cancelled the summit with North Korea that’s as due to take place in June. Not only was the summit canceled but he was back to threatening the DPRK with a military response.
Markets seem less bothered about that than I might have guessed 18 months ago. But the mostly sanguine reaction in stocks is in keeping with the past year's trade. Rather it seems the prospect of a looming increase in the supply of oil to counter the Iran sanctions was more important.
So at the close, the S&P 500 finished at 2,727 down 0.2% - 5 points. What’s important about that though is price is still trapped in this 40 odd point range between 2700 and 2742/45. That’s the zone the S&P has trading in around 3 weeks now. The Dow fell 0.3% to 24,811 and the Nasdaq 100 was just 0.06% lower at 6,949.
European stocks were lower across the board with the FTSE and DAX off around 0.9% while the CAC lost 0.3%.
Here at home the SPI fell into the mid 5,980’s at one point overnight but it’s back at 6,013 now suggesting a mild down day for the index in trade today.
On forex markets traders were consistent in how they’ve approached these types of things in the past 6 months or so. That is, the US dollar has again lost a little ground and is down 0.25% in US Dollar Index terms to 93.765. The euro is up roughly the same amount at 1.1725 in what looks like a nascent recovery which could propel it toward 1.1950/1.20. The yen is naturally higher as well with USD/JPY at 109.27, off 0.75% as the bad news and a weaker US dollar combine to buoy the yen.
Sterling is up about 0.3% to 1.3388 while the commodity bloc largely marketed time with the euro. The Aussie dollar is up at 0.7582 and it may have further upside toward 0.7630, maybe 60, as long as stocks don’t go into a funk. The kiwi is at 0.6933 and USD/CAD is at 1.2885.
Also impactful on the US dollar was a response to a question from Dallas Fed president Robert Kaplan agreeing that the Fed tightening cycle might be done in 2019. That and worries about th US associated with North Korea seemed more important than the lingering concerns about Italy, the Turkish lira getting belted again, and ECB minutes that suggested there can be a further moderation in EU growth. Oh, and right on cue, German Q1 GDP hit consensus of 0.3% down from 0.6% in Q4 2017. YoY growth decelerated from 2.9% to 2.3%.
It’s also worth noting China is currently actively courting Germany on Angela Merkel’s visit. Or is it the other way around. Likewise, Macron and Putin have said they are working together to keep the Iran deal intact
To commodities then and the Russians are suggesting that oil production may soon rise. Readers know my tea leave reading suggests OPEC will move so news that Russian energy minister Alexander Novak pushed that idea last night as did the CEO of Lukoil progresses the theory. Novak and Saudi energy minister Khalid al-Falih were due to meet overnight. The washup is that both Brent and WTI are lower by 1.2% and 1.5% respectively to $78.87 and $70.67 a barrel.
Copper was up 0.8% to $3.085 while the news on North Korea finally shook gold from its torpor with prices rising to $1306 this morning.
On the day today, it is again quiet here at home. In Japan, the Tokyo CPI is out and then tonight it is the Ifo business survey data is out in Germany. UK GDP is out with the 2nd read expected to show Q1 growth of 0.4% with a yoy rate of 1.4%. 2nd read? We are still waiting for our first here in Australia :S. In the US tonight durable goods promise to send the week out with a bang.
h2 Here's What I Picked Up (with a little more detail and a few charts)/h2 h2 International/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.