Currencies
EUR/USD – has dropped significantly for no real fundamental reason. The data out of the US was positive, but didn’t warrant such a strong move, but as we have moved up quite significantly, there probably has been some profit taking as well. In addition the better than expected ADP report, could have caused some to be scared to hold long positions heading into the NFP tomorrow.
USD/JPY – is moving slightly up as the USD strengthens a bit after the data yesterday, but the JPY remains very strong. If we are able to see support hold around these levels we could see a W formation forming, especially if we get a strong NFP tomorrow.
GBP/USD – remains trading at the highest level in nearly a month as everybody will be watching what the BOE will decide regarding the interest rate and QE. The overall assumption and expectation is that the BOE will cut the interest rate by 0.25 points and possibly also expand QE already now. In case the BOE decides not to act, we can expect the GBP to strengthen a lot, as that is not something the market expects.
USD/CAD – the resistance around the 1.312 level remains intact as we see the CAD strengthen due to the fact that oil has moved up after the inventories.
Indices
Dollar Index – has moved up after the better than expected ADP data, fuelling expectation for a positive NFP tomorrow. We have seen in the past though that the ADP and NFP can show totally different numbers, so we can see it as an indication, but definitely not as something certain.
S&P 500 – was trading down for most of the day, but managed to turn around after we saw the energy sector recover after the inventories. A lot will of the price action will depend on tomorrow’s NFP as a strong NFP is likely needed in order for the interest rate to possibly go up this year.
Commodities
Gold – we were not able to mark the highest level in 2 years as we were unable to cross the 1375 level. The positive ADP data from yesterday is raising the expectation a little bit that the NFP will be strong as well, although that does not necessarily have to be the case.
Oil – marked a new low straight after the inventories, which showed the second increase in 2 weeks. However, this was quickly pared as US production finally declined again, but more importantly due to a large drop in gasoline inventories. As a reminder, the huge supply of gasoline has been one of the reasons oil has dropped in recent weeks.
Stocks
LinkedIn (NYSE:LNKD) – will be releasing its earnings after the market closes today.
Tesla (NASDAQ:TSLA) – once again reported a loss and also worse earnings than expected, something that appears to become a habit. It also didn’t reach its targets as was already expected. However, Elon Musk said that it expects that the overall target will be reached this year and that the production problems which have hampered the company recently are solved. He said the company is still on target to produce 500,000 cars in 2018. We will wait and see if that is indeed the case.