Market Brief
The S&P 500 broke another record yesterday as it closed at an all-time high, breaking the previous record from August 23rd this year. The blue chip index closed at 2,198 points on Monday as investors continued to cheer the election of Donald Trump but was unable to break the symbolic 2,200 points resistance. On Tuesday, Asian equities followed Wall Street's lead with the Shanghai Composite surging 0.94% and Hong Kong's Hang Seng jumping 1.51%. In Japan, the Nikkei and Topix indices edged up in spite of a 7.4 magnitude earthquake, sparking tsunami fears. Both indices ended in positive territory, with the former edging up 0.31% and the latter rising 0.32%. New Zealand shares were the ones to move below the neutral threshold with the S6P/NZX falling 0.48% to 6,816.40 points.
In the FX market, investors are struggling to find a new driver as the US dollar remains in overbought territory. EUR/USD slid 0.15% in overnight trading after surging 0.30% on Monday. We maintain our view that the pair should correct to the upside in the short-term. However the upcoming ECB meeting on December 8th will likely prevent traders to reload long EUR position. Looking at option positioning, investors have turned extremely bearish regarding the single currency with the 6-month 25 delta risk reversal measure freefalling to -2.50%, the lowest level since June 2015, which indicates put options are in great demand compared to call.
The Japanese yen remained stable overnight in spite of the earthquake. USD/JPY fell to 110.27 in early Asian session before recovering to 111.24 in early European session. The pair is still struggling to break the 111.91 key resistance level from April this year. Just like in EUR/USD, we believe that a correction may be healthy as the pair is also trading in overbought territory.
The pound sterling stabilised this morning after rising around 1.40% yesterday after British Prime Minister Theresa May promised to lower corporate tax, most likely below 15%. It didn't take long to see a sharp appreciation of the pound against most of its peers. GBP/USD climbed back to 1.25, while EUR/GBP collapsed to 0.8495, the lowest level since mid-September.
Today traders will be watching retail sales from Denmark; current account balance from Brazil; unemployment rate from South Africa; retail sales from Canada; existing home sales and Richmond Fed manufacturing index.
Global Indexes | Current Level | % Change |
Nikkei 225 Index | 18162.94 | 0.31 |
Hang Seng Index | 22698.74 | 1.53 |
Shanghai Index | 3248.352 | 0.94 |
FTSE futures | 6808 | 0.64 |
DAX futures | 10756.5 | 0.77 |
SMI Futures | 7888 | 0.34 |
S&P future | 2201.5 | 0.39 |
Global Indexes | Current Level | % Change |
Gold | 1214.78 | 0.04 |
Silver | 16.73 | 0.83 |
VIX | 12.42 | -3.35 |
Crude wti | 48.67 | 0.89 |
USD Index | 100.99 | -0.06 |
Today's Calendar | Estimates | Previous | Country/GMT |
DE Nov Consumer Confidence Indicator | 0,5 | 1,2 | DKK/08:00 |
DE Oct Retail Sales MoM | 0,40% | 0,30% | DKK/08:00 |
DE Oct Retail Sales YoY | - | 1,70% | DKK/08:00 |
UK Oct Public Finances (PSNCR) | - | 13.3b | GBP/09:30 |
UK Oct Central Government NCR | - | 22.5b | GBP/09:30 |
UK Oct Public Sector Net Borrowing | 6.0b | 10.1b | GBP/09:30 |
UK Oct PSNB ex Banking Groups | 6.0b | 10.6b | GBP/09:30 |
SA 3Q South Africa Unemployment | 26,60% | 26,60% | ZAR/10:30 |
UK Nov CBI Trends Total Orders | -8 | -17 | GBP/11:00 |
UK Nov CBI Trends Selling Prices | - | 8 | GBP/11:00 |
UK BOE Policy Maker Kristin Forbes Speaks in London | - | - | GBP/11:30 |
BZ Oct Current Account Balance | -$3100m | -$465m | BRL/12:30 |
BZ Oct Foreign Direct Investment | $6500m | $5233m | BRL/12:30 |
CA Sep Retail Sales MoM | 0,60% | -0,10% | CAD/13:30 |
CA Sep Retail Sales Ex Auto MoM | 0,50% | 0,00% | CAD/13:30 |
UK Bank of England Bond Buying Operation | - | - | GBP/14:50 |
US Nov Richmond Fed Manufact. Index | 0 | -4 | USD/15:00 |
EC Nov A Consumer Confidence | -7,8 | -8 | EUR/15:00 |
US Oct Existing Home Sales | 5.44m | 5.47m | USD/15:00 |
US Oct Existing Home Sales MoM | -0,60% | 3,20% | USD/15:00 |
BZ Oct Tax Collections | 148819m | 94770m | BRL/23:00 |
BZ Oct Formal Job Creation Total | -82500 | -39282 | BRL/23:00 |
Currency Tech
EURUSD
R 2: 1.1259
R 1: 1.0954
CURRENT: 1.0616
S 1: 1.0521
S 2: 1.0458
GBPUSD
R 2: 1.2857
R 1: 1.2674
CURRENT: 1.2467
S 1: 1.2302
S 2: 1.2083
USDJPY
R 2: 113.80
R 1: 111.45
CURRENT: 110.85
S 1: 106.14
S 2: 104.97
USDCHF
R 2: 1.0328
R 1: 1.0257
CURRENT: 1.0107
S 1: 0.9632
S 2: 0.9537
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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