Global Stocks Rise on Trade Optimism and Japan Stimulus

The euro rose against the USD today as the market reacted to a number of negative data. In Germany, data showed that factory orders declined by -0.4% in October after rising by 1.5% in September. This data showed that the two-year recession in Germany’s manufacturing industry is not over. In Spain, industrial production declined by 1.3% after soaring by 0.8% in September. The same trend of weak data was seen in the European Union. Retail sales in October rose by 1.4%, which was lower than the consensus estimates of 2.2% and September’s growth of 2.7%. The retail sales fell by -0.6% on a MoM basis. This was below September’s decline of -0.2%. Meanwhile, the final preliminary Q3 data showed that the EU economy grew by an annualized rate of 1.2%. 

The price of crude oil rose slightly as OPEC+ members started their two-day meeting in Vienna. The meeting will chart the way forward for the price of crude oil in the near future. Saudi Arabia, the de facto leader of the cartel, is said to be pressuring countries to slash production. Iraq too has said that a 400k barrels per day cut would be adequate. Other members of the cartel have resisted cuts. In response, Saudi has threatened to open its taps, which would lower prices and affect the economies of other members. Brent crude oil and WTI have gained by 13.8% and 24% respectively this year, whilst OPEC+ has slashed oil production by 1.2 million barrels per day this year.

Global stocks rose today on trade optimism and Japan stimulus. In Asia, the Hang Seng index rose by 154 points while China A50 rose by 78 points. In Europe, the DAX, CAC, and Stoxx 50 rose by 35, 45, and 21 points respectively while in the US, the Dow and S&P500 futures rose by 120 and 13 points respectively. The market still believes that there will be a trade deal. In a statement, China insisted that a trade deal is possible but reiterated that the US must remove tariffs. Meanwhile, Japan’s Shinzo Abe launched the biggest fiscal stimulus package in three years. The world’s third largest economy has been hit by the US-China trade war, a separate Japan-South Korean trade war, high consumption tax, and typhoons.

EUR/USD

The EUR/USD pair rose today from a low of 1.1066 to a high of 1.1096. The price is along the upper line of Bollinger Bands. The Demarker indicator is overbought while the momentum indicator has been unmoved. The pair may remain at the current levels ahead of official NFP data. 

AUD/USD

The AUD/USD pair declined after weak retail sales and trade data. The pair moved from a high of 0.6855 to an intraday low of 0.6825. On the hourly chart, the price is slightly above the 61.8% Fibonacci Retracement level. The price is below the double-top pattern that was created yesterday. The short and medium-term moving averages have made a bearish pattern. The RSI has been declining and is currently trading at 38. The pair may continue declining.

GBP/JPY

The GBP/JPY pair continued rallying as traders placed their bets on a conservative victory in the upcoming elections. The pair reached a high of 143.05, which is the highest level since May 10. This is above the 14-day and 28-day moving averages while the RSI is above the overbought level of 70. The pair is also trading along the upper line of the Bollinger Bands. While the pair may continue soaring, there is also a likelihood that the pair may see a pullback ahead of the election.