October 17, 2018
OVERNIGHT MARKET SNAPSHOT (7:15am AEDT)-
The US bounced back with a vengeance as investors look ahead to earnings season. Some solid corporate results that were better than expected gave buyers a hint of what may be to come for earnings. US bonds edged slightly higher which held the USD in check. The DOW closed up a massive 547.87 pts or 2.17% while the broader SP500 also had a big night up 2.15% and the Nasdaq outperformed to close up 2.89%. In Europe shares also rebounded on optimism fueled by the start of the reporting season. Third quarter earnings for the STOXX600 are expected to show that they have risen 14%.
Emerging market indexes were slightly lower while the US posted its widest deficit in six years. Economists generally view the corporate and individual tax cuts and an increase in government spending as likely to balloon the nation’s deficit further. Much of the widening of the deficit came from more spending on interest payments.
The USD was relatively unchanged for the session as US bonds settled and traders took a breather ahead of the FOMC meeting minutes tonight. The GBP was higher as data showed an increase in wages while the EUR and AUD were flat at the close after a mixed session.
Gold gave up some of the previous gains as price fell away from highs made earlier in the session. Copper held its ground to finish relatively unchanged as price grinds away awaiting further direction on tariffs and hence demand from China. Oil was higher in a volatile session as concern over increased US shale production was more than offset by coming sanctions on Iran and increased tensions with Saudi Arabia.
Cryptocurrencies again edged higher finding some buying support. Bitcoin is currently trading at $6687.1 up 0.39% while Ethereum is at $213.94 up 1.64% and Ripple is at $0.47855 up 5.77%.
Locally, the ASX200 closed higher up 32.8 points as the banks reversed sentiment to drag the index higher. Banks were strong out of the gate but then faded into the close while Gold stocks found buyers along with Miners. Advancing stocks outnumbered falling ones by 644 to 523 and 339 ended unchanged.
The ASX200 is expected to open up 35 points after the SPI200 followed the US higher overnight.
ECONOMIC DATA OUT TODAY (AEST) –
AUD MI Leading Index 10:30am
GBP CPI and PPI Data 7:30am
EUR Core CPI Data 8pm
USD Building Permits and Housing Starts 11:30pm
USD Crude Oil Inventories 1:30am
USD FOMC Member Brainard Speaks 3:10am
EUR German Buba President Weidmann Speaks 3:30am
GBP MPC Member Broadbent Speaks 4am
USD FOMC Meeting Minutes 5am
SPI200 INTRADAY LEVELS TO WATCH –
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