STATE OF THE MARKETS
China cut rates as the US closed for MLK. Global equities closed higher on Monday after China decided to lower its interbank rate to 3.17% from 3.50% in a move to spur its slowing economy. FTSE UK (+0.91%), Germany DAX (+0.32%) were up while Nikkei (+0.83%) and Shanghai (+0.49%) were climbing higher at writing as the US markets closed for Martin Luther King Holiday. Early Asian Tuesday, the 10Y yield finally broke the 1.80% barrier as the Dollar index rebounded to 95.35 mark.
In the commodities market, crude continues to climb past $84.50/bl after stalling at $84/bl on profit taking. Gold rebounded back above the $1820/oz barrier after it was fixed lower on Friday as the Dollar strengthened. Elsewhere, iron ore pulled back to $126.25/tn on profit taking after it peaked at $128/tn last Wednesday.
In the FX space, long and medium term accounts are more bearish than short term traders as Swiss advanced further in the demand territories. Overall sentiments however, are slightly bullish as Yen and Dollar were sent to the back burner after China reduced its interbank lending rate. On Tuesday, markets look for earnings reports from Charles Schwab (SCHW), Goldman Sachs (GS), PNC Financial (PNC), Truist Financial (TFC) and Bank of NY Mellon (BK) as well as latest numbers on US manufacturing sector and housing markets.
OUR PICK – EUR/AUD
Bears’ orders to be filled at last month’s open. Aussie closed with a bullish hammer in December should not come as a surprise after iron ore continues to strengthen as China continues to exhibit demands. Subsequently, this forced Euro/Aussie to close with a bearish hammer and as of this writing waiting to fill bearish orders at 1.60 the figure. Aussie yields might not be as attractive as it’s used to be but we believe higher commodity prices would benefit the Aussie in the near term.
Disclaimer:
This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.