Market Commentary 22 Nov 2019

HIGHLIGHTS

Similar to last Monday’s market movement, stocks rallied into record territory with the news that the US and China are close to a “Phase-one” agreement. DOW went above the 28,000 marks for the first time and S&P above the 3100 levels. A few popular stocks rallied hard such as Microsoft, Apple and Google into lofty valuations.

Treasury yields still went higher by about 3 basis points with risk on mentality back in the vogue.

On the economic data, Retail Sales was slightly above expectations and came out at 0.3% m/m.

DOW -        up 20.1 %  YTD

S&P –          up 24.5 %   YTD

NASDAQ –  up  28.7 % YTD

HEADS UP

• EUR: ECB Financial Stability Report
• CAD: Consumer Price Index (OCT)
• USD: FOMC Meeting Minutes
• EUR: OECD Economic Outlook
• JPY: National CPI (OCT)

DAILY FEEDS

GOLD:

Gold had a nice rally last week after touching the 1450 support. But this commodity will continue to be vulnerable on the news that the US and China are close to reaching an agreement on tariff talks. Gold even had some selling pressure when NZ put their rate on hold against market expectations. With the US market at record highs, this will also dampen demand for gold as investors’ appetite will be on riskier assets. But if the trade talks fail or Hongkong conflict escalates, then we might see this metal revisit the 1500 mark.

Gold Chart

EUR:

Technically, Euro is still on a downtrend band although the movement here has been less and less volatile. Even with the small rally from 1.0990 to 1.1060 over the last few days, Euro still has a lot of selling pressure.

EUR Chart

AUD:

AUD and NZD had a mixed performance last week with the AUD dropping after a disappointing Unemployment figure which showed a drop of 19,000 jobs and rate of 5.3% while the NZD rallied after an unexpected pause in rate cuts by the RBNZ. The AUDNZD dropped more than 200bps in two days’ time from 1.0814 to 1.0605.

BITCOIN:

A fresh wave of selling has hit bitcoin prices after the Fed’s Mester announced that “the Fed is studying digital currency but no plans to go that way”. Bitcoin tried to rally after hitting 8,500 but failed and now hovering above the 8,100 support.