Market Update – 16-09-2016

Currencies

EUR/USD – with the data out of the Eurozone coming in as expected and most US data weaker than expected, we would have expected the pair to move higher. However, while there was a small upwards move right after the US data, this was quickly pared and we closed only marginally higher. With the inflation data we will get the final important data out of the US today before the FED will meet next week. The chances that the FED will raise the interest rate next week have dropped after the weak data, although it cannot be ruled out.

USD/JPY – with the FED unlikely to act and more and more uncertainty on what the BOJ will do next week, we see the JPY strengthen against the USD. Support around the 101.26 level is still at its place and this could be tested ahead of the BOJ decision next week. If we hear more signs that the BOJ will take definite action, we can expect a more up though.

GBP/USD – the BOE did not surprise and left the interest rate and QE unchanged. It did however slightly improve its outlook for economic growth for the quarter to 0.3% from the earlier 0.1%. However, they still expect to cut the interest further in November if their forecast is met, which provided little upside for the GBP. The weak data out of the US helped to move up a little bit, but we are dealing with the 1.324 level again.

gbpusd

AUD/USD – turned around after the weak US data and is trading above the 0.75 level again.

USD/CAD – moved down again on the backdrop of a weaker USD, and also oil which was able to recover a little bit from the earlier lows. Nevertheless, oil is still not really seeing a recovery, and with the support around the 1.312 not too far away the downside is limited at the moment, unless we get bad inflation data out of the US and/or we see a further recovery of the oil price.

Indices

S&P 500 – after trading lower we saw a sharp recovery after the data out of the US was weaker than expected, and a correction in oil. The S&P was also helped by Apple (NASDAQ:AAPL) which rose more than 3% in trading yesterday.

Commodities

Copper – while the precious metals are dropping, we can see a large upwards move in copper prices as it is a base metal. The reason we are seeing copper move up is an increased demand in copper from China.

copper

Gold – even though the USD was weaker yesterday and the prospects for a rate hike next week have been lowered even more, gold still traded down and is doing so as well this morning. On the other hand though, the likelihood for a December move is still high and we are getting closer to the 1300 level.

gold

Oil – traded up and down yesterday but remained well contained between the support and resistance levels. The weaker USD helped oil move upwards a little, but reports on increased production out of Nigeria and Libya was able to cap these gains. Obviously we will be looking at the number of active rigs to see if there was another increase.

oil

Stocks

Apple – is continuing to climb higher and has now reached the highest level this year. This comes after the initial reaction to the iPhone 7 was muted, but now optimism is definitely taken over.

apple

Deutsche Bank (DE:DBKGn) – was offered a settlement of $14 billion by the US Justice Department to settle several investigations related to mortgages still stemming from the financial crises. It is highly likely that the final amount that will be paid will be significantly lower though, as that is usual, and also Deutsche Bank has already said it sees a final settlement as being much lower.

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