Currencies
EUR/USD – with strong data out of Germany, and the weak data out of the US another attempt was made at the 1.12 level, but once again was unable to hold. ECB President Draghi said that he sees the interest rate as remaining low and also didn’t see a fast end to QE as he will speak again shortly, as we will see if FED Chair Yellen will address monetary policy. Before that we will have some more data out of the US which will show if consumer confidence improved.
USD/JPY – reached the highest level in a month with the stronger USD and equity levels near record highs. Demand for the safe haven is low at the moment although we know that this can change in an instant if there is political turmoil. North Korea and Syria are the most likely sources, especially since the US has said that is has identified some preparations for a new chemical attack by the Syrian government.
GBP/USD – PM May secured backing from the DUP in order to establish a minority government. With the ECB President and FED Chair speaking, BOE Governor Carey obviously cannot stay behind and will also speak after the financial stability report has been published.
NZD/USD – while the USD has been gaining ground versus most other currencies, the NZD is quite resilient in recent weeks, and on its way to mark its 7th consecutive week of gains, although it is trading at an area of resistance.
Bitcoin – dropped over 5% although intraday it was close to dropping 10% as Coinbase was down for a while, once again highlighting that the cryptocurrency market is still in its initial stages. Nevertheless, a correction is only logical after rising too much and could actually be good, as it opens the door for new investors coming in and to become more resilient in the future.
Ethereum – after a spectacular rise we are now seeing a sharp correction taking place, which could signal the start of a general and larger correction before marking a new baseline from where it will be able to climb back up again.
Indices
Dollar Index – remains trading in a tighter range as we are able to identify a short-term downwards trend line on the 1 hour chart. With oil prices edging up again as well, there are some more hopes that inflation will not be that adversely affected and the path is still clear for another rate hike, as we have seen in any case that the lower inflation data has been largely disregarded for now by several FED members.
S&P 500 – closed slightly higher as it is still trading near its record high. There are more and more people who are waiting for a crash or sharp correction, as the market has been on a long run, especially if we look at history. The S&P has been in an upwards trend since the end of the crises 2009 and has run already for over 8 years now, something that can be clearly seen on the monthly chart below. The big question is not if we will see a downwards trend emerging, but rather when and where the top will be.
Commodities
Gold – after the GBP, Ethereum, now gold saw a flash crash, although it was fairly limited. Still, gold dropped nearly $20 within a minute, most likely by an erroneous trade, as it was a trade with a huge volume as well. We can see that gold was able to base itself above the support around the 1240 level.
Oil – continues to edge higher, although the gains are limited due to the lingering oversupply of the markets. Still, it is the longest streak of consecutive rising prices in over a month and will be trying to mark its first weekly gain after dropping for 5 weeks in a row. However, a lot, if not everything, will depend on the inventories and production numbers tomorrow. Even though inventories have come down from its record high of over 535 million barrels to 509 million barrels last week, it is still around 9 million barrels higher than last year.
Stocks
Google (NASDAQ:GOOGL) – is expected to hear today the size of its fine which is expected to be in excess of €1 billion for promoting its own shopping service, claiming false competition, and may also force Google to change the way it shows the results to become more transparent and not favor its own service.