Currencies
EUR/USD – is moving up again as the USD is weakening, and could be testing the resistance again as we await the manufacturing data out of the Eurozone this morning and later in the day out of the US. Next week should be interesting as we get GDP data out of the US as well as inflation data out of the Eurozone.
USD/JPY – dropped to test the support around the 111 level before moving back up to close pretty much unchanged.
GBP/USD – moved up again as the USD was unable to strengthen, and PM May put forward a proposal that would make it able to EU citizens to remain in the UK, as there are attempts to reach a soft Brexit and not go head to head with the EU in the negotiations. There has been a lot of talk about the interest rate in the UK this week which caused quite a bit of volatility. Next week we will get new GDP data out of the UK, which will undoubtedly be used by either side to make their case for or against a rate hike.
USD/CAD – dropped yesterday after some strong retail sales data out of Canada which strengthened the CAD, as well as rising oil prices, although we see that energy prices have had less of an impact in recent weeks on the CAD, unlike before. Today we will see inflation data out of Canada as well.
Indices
Dollar Index – we are starting to see more of a sideways move on the index as we can also see the Bollinger bands converging, something which indicates that we can expect a larger move soon.
S&P 500 – closed without much change as most sectors didn’t move much, and only the energy and financial sector in minus, but this was offset by a strong performance of the healthcare sector as it looks like a new vote on a healthcare plan is in the works although there are still hurdles on the way.
XLE (NYSE:XLE) – even though oil was able to recover a bit, the energy sector as a whole didn’t, although it didn’t drop below the lows of Wednesday.
Commodities
Cocoa – is getting very close to complete the M formation, which could happen today already, although the commodity sector is trying to recover a bit this morning.
Gold – today is to decide if gold will drop for a third consecutive loss or not as it is edging higher due to a stable USD and another rocket engine test by North Korea.
Natural Gas – was able to keep finding support and is trying to move away from that now as the energy sector as w whole is trying to recover somewhat after its recent losses.
Oil – rose for the first time this week amid some possible dip buying, although we see that since OPEC decided to extend its production cut and freeze last month, oil has been unable to move up, and every more up is only followed by a leg lower. Nevertheless, if we will see inventories go down once more next week (which would be the third week in a row) that could give more support for oil prices. It is possible that this would happen, as OPEC is exporting less to the US and there is also a tropical storm which is affecting production in the Gulf of Mexico.
OPEC is in a tough spot, as they obviously want to see a higher oil price, but are between a rock and a hard place. They could cut production further, something that will not be welcomed by all members, but that would also mean losing market share, something they have been trying to prevent. Another option would be to cap production for Libya and Nigeria who have been exempt from cutting or freezing production and are the main cause of the renewed state of the market. In any case, it appears that continuing the current state is not doing much, as production in the US keeps on rising.
Today we will see if the number of active rigs continued to increase.
Stocks
Tesla (NASDAQ:TSLA) – confirmed it is in talks to open a manufacturing facility in China as was reported earlier in the week, a move which would save it 25% tax in China and help it making more inroads in the important Chinese market, where electric vehicle usage has been booming.
Teva – as mentioned earlier this week, it looks like Teva is changing direction after hitting a 12½ low and is now close to breaking through an important level at 32.50. yesterday Teva benefitted from an overall strong performance by the healthcare sector as the Trump Administration is reportedly edging closer to a new healthcare reform plan.
