Daily Markets Broadcast 2019-05-08

Daily Markets Broadcast

2019-05-08

Stocks tumble on trade war standoff

US indices fell uniformly yesterday amid fears about Trump’s tariff threat. Safe haven assets were in demand as investors rotated out of equities. The Reserve Bank of New Zealand holds its rate meeting today and is widely expected to trim the benchmark rate by 25 bps to 1.50%.

US30USD Daily Chart

Source: OANDA fxTrade

• The US30 index posted the biggest one-day loss since January 3 yesterday as the implications of the tariff threat were considered
• The index closed below the 55-day moving average at 26,054 for the first time since January 17. The 200-day moving average is at 25,396
• The IBD/TIPP economic optimism index jumped to 58.6 in May, well above economists’ forecasts, and the highest reading since Oanda began monitoring the series in 2010.

DE30EUR Daily Chart

Source: OANDA fxTrade

• The Germany30 index fell the most in 6-1/2 weeks yesterday amid rising concerns about a possible US-China trade war standoff
• The 23.6% Fibonacci retracement of the rally since December is at 11,938. The rising 55-day moving average is at 11,787, and has supported prices on a closing basis since February 8
• German industrial production is expected to fall 0.5% m/m in March, according to the latest survey of economists. Factory orders fell a less-than expected 6.0% in the same month, data released yesterday showed. It was still the 10th consecutive month of contraction.

XAU/USD Daily Chart

Source: OANDA fxTrade

• Gold looks poised for its fourth consecutive daily gain today as its safe haven status is enhanced amid the tumult on Wall Street
• Gold is trading within an unfolding wedge formation, awaiting a breakout either way. The 55-day moving average at 1,295.5 looks set to cross below the 100-day moving average at 1,294.2 later this week. This could be interpreted as a longer-term bearish signal
• The World Gold Council has reported that Exchange-traded Funds’ gold holdings fell 2% in April, bringing total net flows for 2019 into negative.

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