Axi | May 15, 2018 10:21
Originally published by AxiTrader h2 Market Summary (7.39am Tuesday May 15)/h2
The S&P 500 couldn’t get up and through the 61.8% retracement level of this years big fall overnight and has actually closed a little in the red this morning. While this was happening the US dollar fought back from early – ECB comment induced – weakness to close largely unchanged while US 2's and 10's are sitting around 2.55% and 3% respectively.
Poised, ready, and waiting for tonight’s release of April retail sales in the US.
Brent crude was substantially higher last night punching up 1.67% to $68.41 while WTI lagged with a 0.6% gain to $71.10. Both moves comes amid tensions in the Middle East and after OPEC’s report last night highlighted again that while the focus is on Syria, Iran, and Israel it’s the collapse in Venezuelan crude production which is the big sleeper story in global oil markets.
Back to stocks now and the attempt to rally stalled overnight. At the open in Asia yesterday it seems traders were a little excited about President Trump’s Tweet on ZTE (HK:0763) which seemed to suggest a cooling in trade tensions. That saw S&P 500 futures up a little less than 10 points as I excited my office. But this morning those futures are down about 1 point and the physical S&P 500 is up just 2.56 points, 0.1%, at 2,730.
The Dow rose 0.27% to 24,899 while the Nasdaq was up 0.17% to 6,964. The big three in Europe were all lower and the wash up here at home was that SPI traders took the June contract up to around 6,137 but it’s back around 6,123 now – up just 1 point.
On forex markets some aggressive comments about the end to QE and the first rate rise being quarters, not years, away from BdF boss Francois Villeroy de Galhau helped lift the euro up to a high of 1.1995 but comments from Loretta Mester helped cause a a sagging in US dollar bears spirits. EUR/USD is 60 points from the high now at 1.1935 – down slightly on the day. Mester said she thinks inflation will become entrenched above 2% and said the Fed is on the right path in raising rates.
So the US Dollar Index is back at 92.63 (bonds higher helped too) and the Australian dollar is back at 0.7528 (-0.2%) after again failing at the 38.2% retracement level of the recent down move in the mid 0.7560’s over the past 24 hours. The yen lost about the same amount with USD/JPY up at 109.64 this morning while Sterling is at 1.3559 – actually up against the US dollar. The Canadian dollar is largely unmoved with USD/CAD at 1.2797 but the kiwi was absolutely poleaxed and is now down at 0.6911 for a loss of 0.76%.
Elsewhere on commodity markets copper was lower by 0.8% to $3.07 after LME inventories rose a little while gold continues to look like a test of the range low – perhaps break – is on the cards. It’s at $1313 this morning.
On the day today we get plenty of catalysts from which we could see a decent reaction in markets.
The RBA minutes are out here at home. But it would be a surprise if there was a surprise. More interesting will be the triple treat of Chinese data with the release of retail sales, urban investment, and industrial output for April. The Reuters poll says the market has forecast 10%, 7.4%, and 6.3% respectively for that data.
Tonight also holds plenty of interest with the release of German flash GDP for Q1, EU area Q1 GDP (2nd estimate), French inflation, UK employment data and the ZEW surveys for Germany and the EU more broadly. And then of course we’ll get US retail sales for April. The market is expecting 0.3% after the previous month’s 0.6% while ex-autos expectations are for a 0.5% increase.
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.
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