Daily Market Update 18th November 2016
ECONOMIC DATA OF THE DAY
- 16:15 – EC - ECB's Draghi Speaks at European Banking Congress in Frankfurt
- 18:45 – EC - Fed's Bullard, SNB's Maechler Speak on Panel in Frankfurt
- 22:35 – US - Fed's Dudley Gives Welcoming Remarks, Answers Questions in NY
- OVERNIGHT NEWS
- Federal Reserve Chairwoman Janet Yellen said during her testimony in front of the congress :
- The economy has made further progress this year” toward the central bank’s employment and inflation goals and as such an interest rate increase could come “relatively soon”
- The outcome of the U.S. presidential election hadn’t changed officials’ view following their last policy meeting that the case for a rate increase had strengthened. “To my mind, the evidence we’ve seen since that time remains consistent with the judgment the committee reached in November,”
- It is fully my intention to serve out that term
- CPI accelerated for a 4th consecutive month and is now at 0.4% MoM from 0.3% and 1.6% YoY but Core inflation remained at 0.1% MoM (Exp. 0.2%) and 2.1% YoY (Exp. 2.2%). Higher prices for gasoline, electrical utilities and shelter drove the gain. Costs for medical services and food were flat
- House Starts grew to the fastest in more than 9 years during October to 25.5% (Exp. 10.4%). Single-family starts leapt 10.7% to an 869,000-unit pace, the highest since October 2007
FOREIGN EXCHANGE (INDICATIVE RATES)
|Currency||Last||% Change||Overnight Range|
|DXY||100.89||0.48||99.96 - 101.01|
|EURUSD||1.0612||-0.61||1.0620 - 1.0746|
|USDJPY||110.17||0.95||108.56 - 110.18|
|AUDUSD||0.7395||-0.99||0.7397 - 0.7501|
|GBPUSD||1.2408||-0.21||1.2409 - 1.2505|
COMMODITIES (INDICATIVE RATES)
|Currency||Price USD||% Change||Overnight Range|
|Gold||1216.42||-0.70||1211.13 - 1231.52|
|Silver||16.68||-1.79||16.59 - 17.09|
|Oil (BRENT)||46.49||-0.30||45.97 - 47.62|
|Oil (WTI)||45.42||-0.33||44.88 - 46.58|
Precious Metals: Gold dropped below its short term support at 1220 on Yellen's hawkish comments despite posting a 0.6% intraday gain. Failure to close above 1220 will hardly be seen as positive as the precious metal has struggled to rebound after last week drop.
Oil: Saudi Arabia, the de-facto leader of the OPEC is optimistic of a deal that will be reached to put a ceiling on production. However, oil falls on stronger USD despite optimism on OPEC deal and is still pinned by its 100 days moving average
- US equities rose on Thursday and major indexes are close to all-time high. The S&P rose 9.5 points to 2186 and is trading very close to its previous high at 2193. With tech stocks, especially the FANG recovering from its slump after Trump’s victory, we may like see S&P, breaking its historical high soon and towards 2200.
- Walmart gapped down on Thursday before recovering to - 3.2% on earnings that missed market expectations. Walmart's quarterly revenue rose by 0.7% year-over-year to $118.2 billion, but missed expectations of $118.8 billion. Earnings came in at 98 cents per share, topping estimates for 96 cents per share The company plans to compete its e-commerce business with Amazon.
- Tesla gained 2.57% on its approval with Solar City and company plans to begin volume production of its recently announced solar roof sometime in summer of 2017. Tesla also expects at least 500m over the next 3 years from solar city.
Oil Falls as Dollar Rally Outweighs Saudi Optimism on OPEC Deal
- U.S. currency rises to 9-month high against peers on Yellen
- Algeria says group near consensus on six-month output deal
Oil fell as the dollar rallied to a nine-month high against its peers after Federal Reserve Chair Janet Yellen signaled the U.S. central bank is close to raising interest rates.
Futures slipped 0.3 percent in New York after earlier rising as much as 2.2 percent. Prices retreated as the greenback rose, making commodities priced in the currency less appealing to investors. Saudi Minister of Energy and Industry Khalid Al-Falih told Al Arabiya television he’s “optimistic” that OPEC will reach a deal to cut output and said that a production ceiling of 32.5 million barrels a day would speed the balancing of the market.
Read the full article at bloomberg.com