Market News
- USD (USDIndex 93.17) holds gains but down from 20 day high at 93.43. CAD recovers after Trudeau gets minority majority and 3rd term.
- Yields collapsed yesterday (10yr down to 1.309% from 1.37% on Friday.)
- Equities tanked globally, Evergrande worries persist. (USA500 -75 (-1.7%) at 4357. USA500.F ticks higher 4375. Some recovery into close was evident & Tuesday calm is following Monday’s carnage. (Tech giants down around 3% – TSLA hardest hit -3.86%). DAX worst of majors -2.3%. Nikkei down 2%. China, Taiwan & S. Korea still closed. VIX spiked to 26.80, highest since May.
- USOil breached under $70.00 yesterday to $69.69, since recovering to $70.50.
- Gold tested down to $1742, recovered $1750, trades at $1763 now.
Overnight – RBA minutes – nothing new – Delta variant has “delayed, but not derailed, the recovery”, the economy will “bounce back”, “conditions for rate rise will not be met until 2024”. AUD back to 0.7275, AUDJPY up to 79.75 from test of 79.00 yesterday.
European Open – December 10-yr Bund future unchanged on the day, US futures slightly lower. In Europe, Riksbank kicks off this week’s round of central bank meetings, which include Norges Bank, BoE & SNB on Thursday. There is also news from central banks in Japan, Brazil, Hungary, Indonesia, Norway, the Philippines, South Africa, Sweden, Switzerland, Taiwan & Turkey this week.
However, FOMC will take centre stage & while stock markets seem to be stabilising after yesterday’s rout, volatility is likely to remain high ahead of tomorrow’s announcement DAX and FTSE 100 futures are up 0.4% and 0.6% respectively, while a 0.5% rise in the Dow Jones is leading a pick up in U.S. futures. In FX markets both EUR and pound gained ground as the dollar struggled with the strengthening of risk appetite. EURUSD is at 1.1735 and Cable at 1.3675. USDJPY dropped to 109.30 yesterday recovering to 109.56 now.
Today – Riksbank rate decision, US housing starts & building permits, ECB’s de Guindos
Biggest Mover @ (06:30 GMT) CADJPY (+0.85%) Trudeau result lifts CAD. From 87.00 on Friday to under 85.00 Monday and back to 86.00 now. Faster MA’s aligned higher, MACD signal line and histogram below 0 line but rallying. RSI 60 and rising. H1 ATR 0.170, Daily ATR 0.70.
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Stuart Cowell
Head Market Analyst
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