Market Highlights
1 - US stock markets close lower. S&P -0.44%, DJ -0.67%, NASDAQ -0.77%
2 - European indices down on the day. DAX -0.15%, FTSE -0.37%, IBEX -0.05%
3 - Gold up $18 at $4291; Brent closes at $108.75 up 2.90%; BTC lower at $76.5K
4 - HSBC stays bullish on global equities through Q4 favouring US and Asia
5 - Oil tanker costs surge as middle east war and supply risks persist
Daily Price Activity
Insights
USD INDEX USD strength continued today with buyers maintaining control. Macro factors contributing: high yields (10 yr reached highest level since 2007 at 5.04%), hawkish Fed expected to raise rates at tomorrow’s FOMC, oil price surging = further inflation fears, weakness of other major currencies, particularly the euro. Will tomorrow be a case of ..buy the rumour sell the fact..? Resistance at 99.40 with support 99.20.
S&P 500 The index closed lower, touching it’s lowest level in almost a month. The same factors which contributed to a bullish USD, had the opposite effect on the stock market. Oil/inflation, higher yields and a hawkish Fed = bearish stock market. Although the S&P is bearish, the charts do not reflect a major technical breakdown. Note the stubborn support being tested for the 3rd time since August. Resistance at 7699 with support 7645.
GOLD The metal closed relatively flat, alongside that of yesterday’s close. With a strong USD and higher yields, the traditional inverse relationship with the dollar has not played out fully. Gold’s resilience may be in part due to the commodity’s safe haven status being recognized in the face of the continuing, perhaps escalating middle east conflict. A sustained break below current support could weaken the technical picture considerably. Resistance at $4318 with support $4285.
BRENT OIL Oil rallied today as a result of growing concern over middle east supply disruptions - the geopolitical supply risk premium being the dominant factor. Up 3% on the day, reaching its highest settlement since May 19. Brent is up 20% over the past month. The next important psychological level is at $110. Resistance at $109.30 with support $105.
BITCOIN A strong sell-off today saw the cryptocurrency fall to its lowest level in a month. Aside from the strong USD and high treasury yields, the immediate catalyst was the US Senate’s failure to advance the ClarityAct, a major proposed cryptocurrency regulatory bill. Today’s break of $75K adds to the short term pressure. Resistance at $78.3K with support $74.9K.
FX Pivot Levels
