Wall Street bounces as deal talks reportedly back on track
Despite comments from US President Trump earlier this week that he was in no hurry to make a trade deal, the US press has reported that officials have said the talks are still making progress. Latest rumors suggest a deal may be done before the December 15 deadline when the next set of tariffs are due to be implemented.Oil prices surge on the inventory drawdown. The Reserve Bank of India is expected to cut its benchmark rate by 25 bps to 4.90%.
US30USD Daily Chart
- The US30index snapped a four day losing streak yesterday as the mood surrounding the trade talks improved.
- The index is holding above the convergence area of the 55-day moving average at 27,214 and trendline support around the 27,225 level.
- The US trade balance and factory orders for October are due today. The former will probably see the deficit narrowing to $48.7b from $52.5b while the latter is expected to show orders rebounding from a contraction in September to a +0.3% gain. Fed’s Quarles is scheduled to speak.
DE30EUR Daily Chart
- The Germany30 index advanced for a second day yesterday amid better sentiment on Wall Street and upward revisions to the Markit services PMIs across Europe.
- The index is still above the 55-day moving average at 12,798 and the 38.2% Fibonacci retracement of the October 3 to November 19 rally at 12,785.
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- German factory orders are expected to rise 0.3% m/m in October, a slower pace than September’s +1.3%. Euro-zone retail sales probably fell 0.3% m/m in the same month from +0.1% the previous month.
WTICOUSD Daily Chart
- West Texas Intermediate (WTI) jumped the most since September 16 yesterday after stockpiles data from the Energy Information Authority showed a larger-than-expected drawdown of 4.86 million barrels in the week to November 29. Analysts had expected a drop of just 1.73 million barrels.
- WTI is heading toward the 61.8% Fibonacci retracement of the September 16 to October 3 decline at $58.675.
- The OPEC meeting starts today in Vienna with expectations that current production caps will be extended, with deeper cuts to production limits also possible. The meeting runs through to tomorrow.