Financial Market Research and Analysis

Our analysts have their fingers on the pulse of the world's financial market news.

CFD trading is high risk and may not be suitable for everyone.
Renewed appetite in the US markets
The US dollar index climbed to a fresh fourteen year high of 103.65 in New York yesterday. The Dow Jones and Nasdaq renewed record. Asian traders sold into yesterday’s US dollar rally. All G10 currencies pared losses against the US dollar, except the Aussie (-0.04%).

The EURUSD consolidated between 1.0383/1.0419 in Asia, after hitting a fresh decade low of 1.0352 in New York. The growing gap between the US and the EU yields remain supportive of a further euro depreciation; further settlement to 1.0300/1.0250 could be a reasonable target for the year-end.

Cable eased to a month low (1.2311). The Brexit shorts dominate, as Prime Minister May is seeking the best way to lead the country outside the European Union. Talks regarding a new Scotland referendum is also on the menu. As such, the political environment remains very much uncertain. The GBPUSD is a touch higher than our short-term target of 1.2298 (Fibonacci’s 50% level on October 7th flash crash to Dec 5th rise). Breaking below this level could encourage an extension of losses to 1.2187 (major 61.8% retracement), before the 1.20 handle.

The USDJPY rebounded from 117.41, as dip-buyers saw opportunity in the price pullback toward the 117.35 (minor 23.6% retracement on December rise). High interest in US Treasuries and solid US yields are supportive of a further rise toward the 120.00 mark. Large option barriers are placed at 119.00 and 120.00 and could slowdown the upside momentum.

Libya based oil rally was stalled below $54 per barrel of WTI, as the country reopened its two major oilfields, El Feel and Sharara, expected to pump 270’000 barrels per day within the next three months. Solid offers are expected to cap the upside pre-$55/barrel, while buyers are touted pre-$50/barrel.

Nikkei (-0.27%) and Topix (-0.53%) were offered in Tokyo. Chinese stocks diverged positively, with Shanghai’s Composite (+0.93%) leading gains among the Asia Pacific indices.

FTSE futures retreated 0.15%, while other European indices traded a leg higher. The DAX (+0.45%) and the CAC (+0.56%) futures saw solid demand on the back of cheapening euro. Eurostoxx futures gained 0.74%.

The FTSE is called 13 points lower at 7030 pence at the open.

CFD trading is high risk and may not be suitable for everyone.