The U.S. dollar index is a basket of six major world currencies weighted against the greenback. See on the daily bar chart for the USDX that prices are selling off rapidly and a price uptrend has been firmly negated. Serious near-term technical damage has been inflicted on the dollar index to suggest still more downside price pressure in the near term. Stay tuned!–Jim
Daily Morning Report
Slowing China Economic Growth Pressures World Stock Markets
Friday, October 18–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly down overnight, led by sharp losses in China stock indexes. The U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
World equity markets were pressured on news that China’s gross domestic product in the third quarter grew by 6.0% on an annual basis, which is the slowest pace in at least 27 years. The GDP 3Q figure was forecast at up 6.1%. On the positive side, China’s industrial production in September was reported up 5.8%, year-on-year, versus expectations for a rise of 4.9%.
The upbeat Brexit news this week has made for a strong rally in the British pound, which hit a four-month high. The U.K. Parliament will vote this weekend to ratify the agreement.
Nymex crude oil prices are firmer in early U.S. trading Friday and trading around $54.25 a barrel. The other key “outside market” sees the U.S. dollar index slightly lower. The greenback is fading, due in part to some downbeat U.S. economic data released this week that ups the odds of a Federal Reserve interest rate cut coming yet this year.
U.S. economic data due for release Friday includes leading economic indicators. Several Federal Reserve officials will also give speeches today, which will be closely monitored by the marketplace.
–Jim
Grain Futures Markets Trending Up
The grain futures markets (corn, soybeans, wheat) are all in near-term price uptrends on the daily bar charts, to suggest sideways-to-higher price action into the end of the year. Don’t expect big, strong bull moves in the grains, but instead a quiet grind higher, which is unassuming and is what veteran grain bulls like to see, as it suggests the price uptrends can be sustained. Stay tuned!–Jim
Brexit Deal Lifts Marketplace Spirits Thursday
Thursday, October 17–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mostly up overnight. The U.S. stock indexes are pointed toward higher openings when the New York day session begins. Risk appetite among traders and investors is a bit more robust Thursday on reports the U.K. and the European Union have reached a deal for the U.K. to leave the EU (Brexit) under good conditions. The deal needs to be ratified by both governments’ parliaments, however.
The Brexit news is making for a strong rally in the British pound, which has hit a four-month high. The Brexit news also put pressure on safe-haven assets like gold.
Nymex crude oil prices are slightly lower and trading around $53.00 a barrel today. The other key “outside market” sees the U.S. dollar index lower and hitting a six-week low overnight. The greenback is fading, due in part to some downbeat U.S. retail sales data released Wednesday that ups the odds of a Federal Reserve interest rate cut coming yet this year.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the Philadelphia Fed business survey, new residential construction, industrial production and capacity utilization and the weekly DOE liquid energy stocks report.
–Jim
Global Stock Markets Mostly Weaker at Mid-Week
Wednesday, October 16–Jim Wyckoff’s Morning Markets Report
Asian and European stock markets were mixed but mostly weaker overnight. The U.S. stock indexes are pointed toward modestly lower openings when the New York day session begins. Hopes for a U.S.-China trade deal, called Phase 1, are somewhat dimming at mid-week, along with investor and trader risk appetites, following last week’s meetings between the world’s two largest economies. No deal was signed last week and specifics of the Phase 1 agreement are missing.
In overnight news, the Euro zone consumer price index for September was up 0.2% from August and up 0.8%, year-on-year. Those numbers were about in line with market expectations and continue to show major world economies not battling inflation, but instead battling deflation.
The International Monetary Fund on Tuesday released a report that forecast global economic growth at 3% in 2019, down from a 3.2% growth rate forecast by the IMF in July. The IMF blamed global trade disputes for the slowing economic growth worldwide.
A feature in the markets this week is the strong rally in the British pound, which hit a four-month high Tuesday on ideas of a Brexit deal forthcoming, to avoid a no-deal Brexit. However, no formal agreement has been reached yet between the U.K. and the European Union. The pound was under some pressure Wednesday.
Nymex crude oil prices are firmer and trading around $53.00 a barrel today. The other key “outside market” sees the U.S. dollar index near steady in early U.S. trading.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, retail sales, the NAHB housing market index, manufacturing and trade inventories, Treasury international capital data, and the Federal Reserve’s beige book.
–Jim
Gold Market Mired in a Price Downtrend
The gold market bulls have faded recently as a price downtrend line is in place on the daily bar chart. The bulls do have the overall chart advantage as prices are not that far below this year’s high. Still, bulls must negate the price downtrend in order to gain fresh technical power to then suggest a challenge of this year’s high, or above. Stay tuned!–Jim