Axi | Feb 14, 2018 09:24
Originally published by AxiTrader h2 Market Summary (7.44 am)/h2
The US dollar is weak again with the yen pushing USD/JPY down below 108 to just a dozen points above the 2017 low of 107.30 overnight. It’s bounced a little, but that yen strength ignited moves in the euro and other currencies against the US dollar such that the US Dollar Index has fallen a little more than half a percent to 89.67.
Recovery aborted.
Of course that might change this evening if US January CPI is higher than forecast. But there is equally every chance that it’s too late by then given we’ll have already seen the release of German inflation and GDP data along with Euro Area GDP.
And on that front UK inflation data was higher than expected which has helped sterling rally back toward 1.39. The Australian dollar, on the other hand, is down slightly at 0.7854 underperforming the US dollar weakness induced strength in copper, base metals, gold, and iron ore – not to mention the solid NAB business survey. AUD/USD is sitting around 0.7858 this morning.
Turning to stocks now and it was a poor night in Europe after Asia’s positivity yesterday. US futures had been down earlier so it’s no surprise the DAX dipped 0.7% or that the CAC 40 fell 0.6%. The FTSE however was more circumspect dipping just 0.2%. At present in the US the big three indexes are in the green with between 0.1% for the Dow Jones Industrial Average and 0.55% for the Nasdaq. At 2666 the S&P 500 is well off the low of the day at 2,637 and sitting just above the 38.2% retracement of the fall from the record highs to last Friday’s nadir. .
On other markets US 10's are at 2.84%, the 2's are at 2.10% and the curve has thus dipped a little to 73 points. There is much anticipation for the release of the aforementioned US CPI for January tonight as a scene setter and confirmation or denial of the market spook the wages data in the US jobs numbers caused earlier this month.
Looking at commodities and it has been a pretty good night for base metals with copper leading the way higher with a 2.45% move. That along with the 0.34% move in gold up to $1327, and the pre-holiday climb in iron ore futures should be supportive of the Aussie dollar. Note I say 'should'. But, I digress. Oil is holding in despite the IEA report saying US production is more than covering the increased global demand. WTI is down just 0.1% at $59.22 while Brent sits at $62.4, up 0.2%.
On the day today we get the release of the latest Westpac Melbourne Institute Consumer Sentiment survey here in Australia. I’ll be particularly interested in the headline but also the unemployment expectations sub-index.
After that, the data gets BIG real quick. Japanese Q4 GDP is out, then Singapore’s data, and of course tonight we get German inflation data for January and Q4 GDP. We also get the release of EU industrial production and GDP growth data as well. Then, of course, it’s US Jan CPI to confirm or deny the bond markets fears. The risk seems asymmetric to me. Even a slightly higher number than the 1.7% expected for core and 1.9% for headline could set the cat among the pigeons given the late cycle stimulus the Trump Administration is pumping into the US economy.
h2 Here's What I Picked Up (with a little more detail and a few charts)/h2 h2 International/h2h2 Australia/h2
Business Insider that shows the relationship between business and unemployment. As it falls, and as underemployment falls we can expect wages to start to rise with about a 6 month lag.
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.