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ATFX Market Outlook, 2019 Dec 12
Personal opinions today:
Many risk events today. Please pay attention to market volatility!
In this morning the federal reserve's FOMC released its decision on interest rates, which was expected to remain unchanged. Later, Fed chairman Powell spoke about the U.S. economic growth, but inflation had yet to pick up. Trade tensions are not likely to improve, and economic instability and downside risks remain. Most important, Fed Chairman Powell said he would consider keeping interest rates unchanged next year and would be prepared to raise them if inflation exceeded the inflation target of 2%. The federal expects to raise rates as soon as 2021.
The federal kept interest rates unchanged in a favorable investment climate, and Dow futures rebounded but still failed to break through resistance to 28,050 high. Gold rallied as the dollar index retreated to the edge of 97 in response to expectations of a longer rate hike. Gold rebounded on the risks of the UK parliamentary election. Also, the U.S. government may impose additional tariffs on China imports on Sunday, raising risk aversion. Safe-haven investors chased gold and the yen. Troubled by trade barriers, crude oil prices have not benefited, limiting the rise.
The key of European data today include German November CPI and Eurozone industrial output for October. But the focus was on the start of the parliamentary elections in the UK this afternoon. Swiss national bank and the European Central Bank interest rate decision and ECB press conference. In other news, the U.S. President is meeting with trade officials tonight to discuss whether to schedule additional tariffs on Chinese goods. If it is granted a reprieve, Dow futures could rise, driving a dollar rally and bullish crude oil prices. Gold and other currencies fell against the dollar.
[Important financial data and events] note: * is important
15:00 Germany CPI ***
15:00 UK General Elections
15:45 French November CPI *
16:30 SNB interest rate decision ***
17:00 IEA releases monthly report **
18:00 Eurozone industrial output *
20:45 ECB interest rate decision **
21:30 ECB President press conference ***
21:30 U.S. November PPI **
21:30 U.S. jobless claims ***
23:30 U.S. EIA gas inventory change *
The next day 01:30 Bank of Canada governor speech **
The next day 03:00 Bank of Canada press conference ***
The federal reserve kept interest rates unchanged, and the dollar's spread over the Euro was steady and bearish. The Euro has a chance to fall to 1.10 or below against the dollar if the European central bank announces tonight that it will continue to ease or plans to cut interest rates further. Just ahead of the general election, the markets expect the conservative party to win control seats and lead the country to an orderly exit from the European Union. The pound rose, indirectly benefiting the euro. Between the start of the British election this afternoon and the end of the evening, the pound will rise or fall, which will help the euro. Suggest for today's market trend is not clear, only for short - term operation, pay attention to the risk.
Pound to dollar
The start of Britain's general election a sharp swing in the pound will mark this afternoon as the conservative party's share of seats in parliament is assessed. The pound rose if the conservatives won more seats. The pound is likely to fall as the Labour Party gains more seats. Trading caution is recommended in the risk sentiment, and election results drive travel. Technical analysis operation, the effect may not be noticeable, please pay attention!
Australian dollar to dollar
The market grew optimistic, telling the Fed FOMC chairman to keep interest rates unchanged for the next year, reducing the Australian dollar's ability to fall against the greenback. But amid concerns about trade barriers to U.S. goods, the U.S. President may impose additional tariffs on China imports starting Sunday. If the tariffs go ahead as planned, the Australian dollar. On the other hand, a delay would help the Australian dollar. Also, by the fundamental factors around the market, the technical analysis of the proposed reference role is lower.
Dollar to yen
The dollar fell, following a slide against the yen, as the Fed left interest rates unchanged and expected to keep them there next year. The dollar could rise against the yen if Dow and Nikkei futures rebound and the dollar stays strong. The key is tonight's meeting between the US President and trade officials to discuss whether to go ahead with new tariffs on China goods. If granted a reprieve, Dow futures rose, helping the dollar extend gains against the yen. Note Dow futures (US30) and Nikkei futures index (JPN225) for reference.
Federal reserve rates will remain on hold for some time, with few opportunities to raise rates and the dollar falling. Crude oil prices rose as interest rates remained unchanged. Add in Canada's trade deal with the United States, and the Canadian dollar has bullish been expected. Next, if the U.S. government extends additional tariffs on China, the price of crude oil will likely rise, which will benefit the Canadian economy and the Canadian dollar. The U.S. dollar is expected to test below $1.31 against the Canadian dollar.
US crude oil futures
It remains unclear whether the U.S. government will suspend additional tariffs on China imports, limiting the rise in crude oil prices. The fed's rate-setting outlook for the economy is good, and holding rates steady for a while will help drive up crude oil prices. In the absence of good news on trade, crude oil prices will likely adjust. Short - term $58 led important support.
The federal reserve announced the suspension of interest rate cuts, a negative for gold prices. But today, all the risk events led to increased risk aversion. Focusing on two critical issues. Britain is on course to leave the European Union if the conservatives party win the most seats in the general election. Also, the U.S. government has delayed requisitioning additional tariffs on imports from China. These two events give the market good news, and gold prices can fall from high. And vice versa!
U.S. Dow Jones industrial average futures US30
Whether the U.S. trade department imposes new tariffs on China could lead to volatility in Dow futures. Technically, 27620 is a significant support level in the first phase of Dow futures correction. Significant resistance notes the November high 28210 resistance.
7450/ 7685 resistance
6850/ 6650 support
The federal reserve announced the suspension of interest rate cuts, bearish for Bitcoin price. Only If Dow future fall, it could bullish cryptocurrency and the bitcoin price could rebound.
Enjoy trading! The content is for reference only. Please do ensure that you understand the risk.
Registered Australian Accountant/ Certified Professional Manager / Certified Financial Advisor Experienced Investor / Media Market Commentator Martin Lam has Over 17 years’ experience in global investment market. Familiar with the worldwide stock indices, precious metals such Gold and Silver, Crude oil and Forex. He operated Martin Currency Trading Company and had partnership with a number of well-known international financial corporations and institutions. Before he join ATFX, he was TeleTrade Greater China development and Sales Director. Mr. Lam attends Hong Kong Now TV and China CCTV finance channel once a week. He also had regularly invited by different media, such as DBC Digital Financial Channel, Hong Kong Economic Times, The Standard, Ming Pao to share his experience to trade in Forex, Precious metals, Crude oil and worldwide stock indices.
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