ALPHA Market Update 09 January 2019

09.01.2019

Market Update

 

 

 

United States

  • FOMC Meeting Minutes will be held at 19:00
  • US President Trump re-issued on Tuesday that the US economic data “looks great.” If he can enjoy long-term low interest rates like his predecessor, maintaining the historical highs of US stocks would be “very simple.” According to the “Global Times”, Trump also said on Twitter today that “consultation with China has been going very smoothly.”
  • The S&P 500 index closed up 0.97%. Dow Jones gained 1.09%. The NASDAQ gained 1.08%.

United Kingdom

  • Last night 20 tory rebels went against the party and supported an amendment to the finance bill which would limit the scope of tax changes under a no deal. This indicates that there is enough cross party support for avoiding a no-deal to avoid the economic stress of a no-deal.
  • Odds for the UK to leave the EU on March 29th 2019 are currently at 64% for no and 36% for yes.
  • the vote is the 15th, meaning there are just 40 days of parliamentary sessions in which the government needs to pass 7 major bills about trade, agriculture, health, immigration etc. there are also a lot of smaller pieces of legislation that needs to be passed. even if the vote goes through the prospect of it being completed in the time needed is unlikely and therefore a50 would likely be delayed
  • DXY is down therefore GBP had a slight rally this morning, but since EU has come into the market it has retraced to close to 1.275.

Europe

  • The EU says the US government has changed the bloc’s diplomatic status in Washington, in practice downgrading it. The Trump administration did not notify the EU about the change. The EU has asked the US to explain the move, EU spokeswoman Maja Kocijancic says. Previously it has been US practice to treat the EU delegation and ambassador “as a country would be”, an EU source told the BBC. The US ranks the diplomatic status of international organisations lower. The EU source, who declined to be named, said the US had changed the way the diplomatic list was implemented, but not the list itself, which describes the EU as an international organisation. The US state department’s order of precedence says the head of an international organisation “should be considered equivalent to a chief of state or head of government, but should be listed in precedence order, after all official representatives of the sovereign nations present”.

Commodities

  • Yesterday the price of West Texas Intermediate (WTI) crude oil, the primary U.S. benchmark, fell 4.8% to a 17-month low. The closing price, $45.88/bbl, marks a stunning fall from a price that closed at $76.40/bbl on October 3rd.

Australia & New Zealand

  • AUD has fallen for the first time in four days versus USD, retreating from the highest level in almost a month, as technical indicators signalled a reversal. “The Aussie continued to weaken broadly although the November trade deficit improved from AUD -358M to AUD -118M. AUDUSD retreated to 0.8912, crossing the 21-dma (0.8933) to the downside. Light bids are seen above this level, while stops are building below 0.8900 (with large option offers expiring today). AUDNZD spiked down to 1.0782 in attempt to clear support at 1.0800,” says a foreign exchange note from Swissquote Bank.
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