Daily Markets Broadcast – 2018-10-15

2018-1-15

Wall Street suffers biggest weekly fall since March

US indices rebounded Friday but still faced hefty losses in the week. Buoyant earnings reports from some banks on Friday failed to prevent the weekly decline. Warnings from global finance chiefs on the fragile state of the global economy, specifically mentioning the trade war, at an IMF meeting at the weekend have set a gloomy tone to start the week.

US30USD Daily Chart

Source: Oanda fxTrade

  • The US30 index saw its biggest weekly decline in more than six months last week despite strong earnings from banks on Friday. More banks report this week
  • The index has regained a foothold above the 200-day moving average at 25,136, having failed to close below it on a daily basis since July 5. A weak start suggests this average may be tested again
  • US retail sales are expected to have risen 0.5% in September, a faster pace than August’s 0.1%. A stronger number could save the index from too much weakness

DE30EUR Weekly Chart

Source: Oanda fxTrade

  • The Germany30 index snapped a seven-day losing streak Friday, but weakness in Asia and US futures could imply a negative open for the index
  • The index tested, and bounced off, the 200-week moving average last week. That moving average has supported prices since July 2016
  • ECB’s Weidmann said on Friday that slower euro-area growth is not consequence of the trade war, but normalization of expansion

HK33HKD Weekly Chart

Source: Oanda fxTrade

  • The Hong Kong33 index looks poised to re-test multi-month lows at the open today. The index hit 25,081 Friday, lowest since May 2017
  • Technical support may be found at the 200-week moving average at 25,125. This moving average has supported prices since January 23, 2017
  • PBOC governor Yi Gang reiterated at the IMF meeting that the government won’t use its currency as a tool to deal with the trade conflict. He believes that the currency is at a “reasonable and equilibrium” level

Daily Markets Broadcast 2018-10-12

 

2018-10-12

Wall Street consolidates after heavy losses

US indices saw wild swings yesterday and struggled to gain any solid traction after recent losses. Both the US30 and NAS100 indices are attempting to regain the 200-day moving averages. Bonds rose due to rotation from stocks which pressured yields and the US dollar. US CPI data came in below forecast yesterday adding to the pressure on yields. Today we see Germany’s consumer price data.

 

NAS100USD

Source: Oanda fxTrade

  • The NAS100 index is seeing a mild rebound from 4-1/2 month lows following a 10.6% sell-off from the start of the month
  • The index has regained a foothold above the 200-day moving average at 7,054. Stochastics momentum indicator has turned bullish, crossing back above the oversold threshold
  • US Michigan consumer sentiment index is expected to rise to 110.4 in October, further confirming a strong US economy

 

DE30EUR

Source: Oanda fxTrade

  • The Germany30 index fell for a seventh straight day yesterday, touching the lowest since December 2016. ECB officials said tight labor markets and slow wage growth will eventually push up core rates
  • The 55-month moving average at 11,190 could be the next technical support point. The index has held above this moving average on a closing basis since Dec 2011
  • Germany’s September CPI data is due today and are seen rising at the same pace as August, 0.4% m/m and 2.3% y/y. Higher than expected numbers would be negative for sentiment as it may force the ECB to start hiking rates earlier than is currently forecast

 

XAUUSD

Source: Oanda fxTrade

  • Gold posted its biggest one-day gain in more than two years as it regained its safe-haven label amid a weakening US dollar
  • The commodity broke out of the 1,220 – 1,180 trading range that had been in place since August. The 100-day moving average at 1,228.99 could act as near-term resistance
  • The US dollar weakened as US yields eased off from recent highs following a strong 30-year auction and as investors rotating from stocks to bonds sought Treasuries