A quiet night for stocks which shrugged off the lack of a Greek deal in Europe and focussed on the Thanksgiving holiday coming up. The big news was really the move in the Yen which is under intense pressure across the board.
Japan remains the world’s third largest economy but the data that is flowing at present speaks volumes for the malaise that is not only gripping the economy as a whole but also at a more granular level with regard to individual companies. Yesterday the trade data showed both exports and imports fell with the former down 6.5% year on year in October which was a much worse outcome than the market was looking for.
I have written much about the Yen lately and it remains my view that substantial weakness is still ahead for this currency against the USD. Last night it also came under pressure across the board and EURJPY is at risk of breaking up through a multi year down trend line stretching back to late 2009.
Fundamentally the Yen has been too strong for too long and the economy is suffering – its fall won’t be linear but this trend to Yen weakness looks set to continue.
Elsewhere overnight the meeting of European leaders to discuss the Greek situation broke up again without resolution and they are going to reconvene on Monday to have another try. This disappointed markets as you would expect and the sticking point seems to be that the IMF can”t participate unless they can see some improvement in the Greek position in the future – thus they fiddling with interest payment terms and other measures to get Greece over the line – just as DE predicted.
But this didn’t seem to worry European stock markets overly with all of the European markets I follow except for Oslo ending in the black. The FTSE was 0.07% higher, the DAX rose 0.16% and the CAC was up 0.44%. Madrid rose 0.36% and Helsinki rose 0.93%.
In the US stocks traded in a fairly tight range in pre-holiday trade and with 8 minutes to go the S&P 500 is up 0.14% to 1390, the Dow Jones is up 0.32% and the NASDAQ is 0.25% higher.
Elsewhere on global FX markets the Australian dollar is off 0.25% to 1.0359, off the low of 1.0332 and well off the high for the past 24 hours just under 1.04 again. The Aussie is directionless against the USD at the moment but there is action on the crosses particularly AUDJPY which looks biased up toward 87 sometime soon – but it’s being driven by the Yen side of the cross as the Aussie is lagging at the moment.
As you can see in the AUDJPY 4 hour chart above the AUD is looking a little overdone and may be due for a pullback – 84.15 would be massive support and we favour this higher in time.
The EIA reported a decline in crude supplies overnight of 1.5 million Bbl’s against the expected increase of 1 million bbl’s and even with the truce in Gaza Crude managed to rally 0.63% to $87.30. Crude is in a shallow uptrend at the moment and retains a positive bias as a result.
In the precious metals market both silver and gold were higher with silver once again outpoint gold rising 1.21% to golds 0.27% rise. At $33.31 oz. Silver is close to downtrend resistance which comes in at $34.34.
Lets have a look at some Meta 4 charts from my AVATrade platform.
EUR/USD: Euro is mostly unchanged against the USD at 1.2823 but that is almost a full cent off the low of 1.2733 overnight:
AUD/USD: What was that Billy Idol song – “dancing with myself”? AUD is just up and down on the spot at the moment and It’s probably a 1.0280-1.0420 range. Prefer the crosses at present:
Data: Thanksgiving in the US tonight but that doesn’t stop the flow of a huge volume of PMI’s coming out of China, France, Germany, Holland and the Eurozone. Also out are retail sales in Canada.
Here is how the markets looked at 7.11 this morning.
Twitter: Greg McKenna.
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