Currencies
EUR/USD – is back to its usual movement, which is down over the last few weeks. The main factor which will decide if we will head further down will be the ECB decision of tomorrow regarding QE. If they decide to extend it, we are likely to see the EUR weaken further. However, if the ECB tapers QE, we could see the EUR strengthen.
USD/JPY – the last few days have seen the least volatility in this pair in recent weeks even though we are still moving higher. It is very well possible that we will see yet another attempt to reach the 115 level. The GDP data out of Japan could prove to be very important.
GBP/USD – after marking the highest level since the October flash crash, the GBP weakened and we moved down. This came in parallel with a renewed strengthening of the USD. We will be waiting to see if the data out of the UK will be solid again and also how the US data will impact the USD.
USD/CAD – remains trading around the support as we will be waiting for the BOC interest rate decision later today.
AUD/USD – is moving down after the GDP data showed a faster drop in the GDP than was expected. Australia hasn’t had a recession in 25 years, so if next quarter will also show a decline in the GDP that will be the first time in a very long time. Many countries would like to have such a record.
Indices
DAX 30 – reached the highest level of the year a day ahead the ECB decision regarding QE.
S&P 500 – after the Dow Jones marks record after record, the S&P is also close to marking a new record high as well.
Commodities
Gold – I mentioned yesterday that gold remains weak, and we saw that it indeed move slightly down again as the USD regained some lost ground. The same is happening this morning as the first test will again be the support around the 1162 level. After that the next support level is quite far away (1123 level).
Oil – as mentioned yesterday, oil was moving down due to the increased production by both OPEC and Russia while they are expected to cut production next month. The amounts that were agreed upon were based that OPEC would produce 32.5 mbpd. With the increased production, the question is, will they cut the agreed amount, or will they cut more to keep producing within the quota of 32.5 mbpd? If so the actual production cut for most countries will be even larger, as they are producing more at the moment. Enough open questions, and this is in addition to the skepticism that already existed on the implementation.
Stocks
Boeing (NYSE:BA) – opened lower yesterday as President-Elect Trump tweeted that he would cancel the contract for Boeing to build 2 new Air Force One aircraft citing high costs, $4 billion according to him. This number has been disputed, but the tweet was enough to send the stock lower, although it was able to close basically unchanged.