Currencies
EUR/USD – continued to move higher to reach the highest level in 2 weeks as also the German data supported a stronger EUR. Data out of the US was also better than expected and this caused the EUR to give up parts of its gains.
USD/JPY – was able to find support at Thursday’s lows and has been moving up ever since the US Presidential Debate started as Hillary Clinton was seen as holding her ground and performing well. This in turn is taking some fear of a possibly Trump Presidency away, causing safe havens such as the JPY to become less interesting.
GBP/USD – saw a sharp drop during the day and almost reached the lows of Monday, but was able to turn around before breaking below that level. The GBP continues to be under pressure though. This week we have no important data out of the UK, something that will change next week, so it will be mainly US data and comments from both sides of the ocean that will decide if we drop further and see new lows.
USD/CAD – extended its gains of Friday, even though oil prices also went up, which usually doesn’t happen, to come close to the resistance around the 1.329 level. Today however we see the pair move down as oil is trading higher with the nearest support at the 1.312 level.
USD/MXN – now that the Presidential Elections in the US are entering their homestretch with the first debate behind us, we can see a strengthening of the MXN. Usually the elections have much less influence, but since Trump has signaled at tougher policies, mainly again Mexico, the MXN is very much influenced by the perceived chances of Trump becoming president. As this is seen less likely after the debate, we can see the MXN strengthen. We have seen it weaken in recent weeks due to the fact that the polls showed that Trump was gaining on Clinton.
Indices
DAX 30 – saw a sharp drop and almost entirely erased last week’s gains. In part this was due to the overall market sentiment, but the reason the German index dropped more than others is also the fact that Deutsche Bank (DE:DBKGn) dropped sharply as well (more below).
S&P 500 – dropped considerably yesterday as more polls showed a dead-heat between Trump and Clinton. The markets are scared of a Trump win, mainly because of his unpredictability, and if there is something there is the markets don’t like it is uncertainty. With the start of the debate, we saw an immediate change in direction and are now getting close to where we started yesterday.
Commodities
Gold – after having tested the support around the 1332 level again yesterday morning we moved up a little but we can see we are trading at a tight range of around $10 after the FED rate decision. We are moving down again and could be testing the support once more today.
Oil – reached the support around the 44.40 level before moving up again to close just below the resistance around the 45.80 level. This comes as there still is optimism and hope that the oil producing countries will reach an agreement to stabilize the oil market, i.e. freeze production, with more countries voicing the need and inclination to reach an agreement. As mentioned quite a few times, the chances of this are not high and also the actual effect is very much in doubt.
Stocks
Deutsche Bank – dropped to the lowest level ever as the German government reaffirmed it would not help the bank. This has created some anxiety as the Department of Justice is seeking a settlement for $14 billion as reported last week, but the bank has only set aside $6 billion raising the possibility that the bank will need to raise capital.
Twitter – reportedly also Disney is interested in a takeover of Twitter, and we see Twitter move up a further 3% in trading yesterday after climbing already over 20% the previous day. In addition it has been reported that Microsoft (NASDAQ:MSFT) could also be interested.