Financial Market Research and Analysis

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FTSE up, BP gains on Woolworths deal
FTSE opened upbeat after two days holiday. Mining stocks (+1.79%) lead gains on the back of firmer oil and commodity prices.

BHP Billiton (+4.33%), Rio Tinto (+2.15%), Anglo American (+3.20%)

The BP-Woolworths deal is the main corporate highlight of the day. BP (+0.34%) said to buy 527 gas stations and 16 development sites across Australia from Woolworths (+1.93%). The deal will help Australian retailer Woolworths consolidating its balance sheet, while making BP one of the leading oil providers in Australia.

The pound trades rangebound against the US dollar and the euro. Cable is testing the 1.2300 level against the US dollar. Despite little conviction on the topside, the broad based softness in the US dollar could support a minor upside attempt in the GBPUSD. Offers are eyed at 1.2300/1.2350.

The euro-pound consolidates gains at about 0.8500. There is a large 0.8496 put option waiting to be exercised at today’s expiry.

Solid resistance pre-1.0500 in EURUSD prevents the single currency from gaining upside momentum against the majors.


Australian stocks hit year highs, Aussie recover

Australian ASX 200 gained 1.01% in Sydney, as basic materials (+2.43%) lead gains. Australian stocks hit the highest levels of this year and are set for a strong close on the back of higher commodity prices and firm appetite in global stock markets following Donald Trump’s victory in the US presidential election.

The appetite in Australian stocks boosted the currency. The Aussie gained 0.38% against the US dollar, yet remains relatively soft due to a significant lack of carry inflows. Offers are eyed at 0.7246 (minor 23.6% retracement on Dec 14th to 23rd fall) before 0.7299 (major 38.2% retrace). On the downside, support is seen at 0.7145 (May’16 low). Stops are eyed below.


Gold set for further recovery

Failure to break above the $1150 did not discourage buyers in Asia. The yellow metal is in demand and could be set for a successful test above the $1150 resistance. Although the rising US yields keep the appetite limited, the stagnation or a short-term correction in the US yield curve could encourage a further correction in the precious metal after it lost past $200 since Donald Trump victory at the US presidential race on November 9th. The key mid-term resistance is eyed at $1175 (major 61.8% retracement on Dec’15 to Jul’16 rise).

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