Sage Investment Club

The major US economic data yesterday (Q4 GDP lower; 3.9% from 4.2% but better than expected 3.6%, strong consumer spending, Durable goods, New Home Sales, Lower Inventories and Weekly Claims at new 22-mth lows) all added to the soft landing, disinflation, scenario for the US economy. A FOMC 25bp hike next week now has a 98% probability, up from 94% yesterday (2% for 50bp!). Stocks rallied, USD recovered and yields picked up from recent lows. Overnight – Asian stocks hit 8-mth highs and Core Inflation in Tokyo  hit a 42yr high at 4.3%. European & UK FUTS also higher. #TESLA gained +10.97%.

  • The USD Index tested the 8-mth lows at 101.25, yesterday, rallied to test 102.00 following the data and trades back to 101.75 now.  
  • EUR – sank below 1.0900 after posting 9-mth highs at 1.0929 and lows at 1.0855 yesterday before recovering to 1.0875 now. 
  • JPY – Sank to test 129.00 yesterday, before rallying to 130.50, back to 129.50 following the CPI data and now up to 130.00.
  • GBP – Sterling has rallied over 1.2400 yesterday and again today but has struggled to hold the key resistance level. Back to 1.2370 now.  
  • Stocks – The US markets rallied yesterday (+0.61% to +1.76%) yesterday.  US500 +1.10%, (+44) 4060,  US500 FUTS trade firmer at 4062. TSLA +10.97%, CVX +4.86%, XOM +4.02% IBM -4.48%. Intel missed after hours -9.7%.  In Europe today LVMH posted strong Earnings, lifting European FUTS further.

  • USOil – topped at $82.00 yesterday before dipping to $80.00. Trades at $81.40 now. 
  • Gold – Tested into $1949 yesterday before breaching $1922 support, rallying to $1940 and now back to $1922.
  • BTC – Continues to hold the $22k handle this week, spiking to $23.7k yesterday, and holds $23k currently. 

Today US PCE Price Index, Personal Income & Consumption, Speech from ECB’s Lagarde.

Biggest FX Mover @ (07:30 GMT) GBPJPY (-0.38%). Declined from a test of 161.75 on close last night as JPY outperformed in Asia, to test 160.70. MAs aligning lower, MACD histogram & signal line positive but falling. RSI 49.76 & neutral, H1 ATR 0.268, Daily ATR 1.808.

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Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, charts and sentiment work together to provide trading opportunities across all asset classes and all time frames.

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