Summary:
- US indices add to their rally. US30 tops 23000 for first time
- USD also moving higher whilst Gold sinks
- UK Inflation hits highest level since 2012 but GBP drops
- Oil.WTI remains close to 2017 highs
Stock markets across the Atlantic continue to break records with the US30 this afternoon breaking above the 23000 handle to make yet another all-time high. The latest move higher has been driven in part by bans, with Goldman Sachs and Morgan Stanley both gaining following their latest trading update.
The positive mood in US indices can also be seen in the US dollar with the buck rising against the vast majority of its peers today. An improved industrial production reading has supported the gains but the market was already higher before the release. Market talk yesterday evening that John Taylor impressed in an interview with Trump for the next fed chair could be part of the reason, with his rule-based system for monetary policy suggesting a more hawkish approach could be adopted should he get the job. The moves in the USD are smaller in scale than those seen in Gold, but obviously related. The precious metal has dropped some $20 in the last 24 hours and now trades back in the low $1280s.
The NZDUSD is dropping in part due to the strength seen in the greenback but also due to some weakness in the Kiwi. Last night’s better than expected inflation data from New Zealand has not seen a sustained rise for the NZD and with the latest GDT auction showing another decline, as well as the uncertain political backdrop in the country at present, the outlook for the New Zealand dollar remains a potential source of weakness.
This morning was dominated by UK based news with the latest CPI reading hitting its highest level in 5 and a half years. This wasn’t enough to support a rise in the pound however, with the GBP pairs seeing some notable weakness in sterling as Governor Carney spoke. Carney didn’t say anything in particular that was dovish but the absence of a firm hawkish stance weighed on the pound and with the market now heavily discounting a rate hike in November there is more scope for downside shocks ahead.
There has been some weakness seen in the crypto space today with Bitcoin pausing after its strong recent rally. This is possible more due to profit taking rather than a fundamental shift with the news surrounding the market fairly positive today. We’ve gotten some promising reports from Australia where the local government has sought recently to amend its Bitcoin regulations which were previously notoriously unfavorable to businesses and individuals. That a move could be seen as a sign that the Australian authorities are still interested in using and adopting the most famous virtual currency.
Oil.WTI remains close to its highest level of the year and as a final note, here’s a technical overview of the market at present.