Daily Markets Broadcast 2018-10-12

2018-10-12

Wall Street consolidates after heavy losses

US indices saw wild swings yesterday and struggled to gain any solid traction after recent losses. Both the US30 and NAS100 indices are attempting to regain the 200-day moving averages. Bonds rose due to rotation from stocks which pressured yields and the US dollar. US CPI data came in below forecast yesterday adding to the pressure on yields. Today we see Germany’s consumer price data.

NAS100USD

Source: Oanda fxTrade

• The NAS100 index is seeing a mild rebound from 4-1/2 month lows following a 10.6% sell-off from the start of the month
• The index has regained a foothold above the 200-day moving average at 7,054. Stochastics momentum indicator has turned bullish, crossing back above the oversold threshold
• US Michigan consumer sentiment index is expected to rise to 110.4 in October, further confirming a strong US economy

DE30EUR

Source: Oanda fxTrade

• The Germany30 index fell for a seventh straight day yesterday, touching the lowest since December 2016. ECB officials said tight labor markets and slow wage growth will eventually push up core rates
• The 55-month moving average at 11,190 could be the next technical support point. The index has held above this moving average on a closing basis since Dec 2011
• Germany’s September CPI data is due today and are seen rising at the same pace as August, 0.4% m/m and 2.3% y/y. Higher than expected numbers would be negative for sentiment as it may force the ECB to start hiking rates earlier than is currently forecast

XAUUSD

Source: Oanda fxTrade

• Gold posted its biggest one-day gain in more than two years as it regained its safe-haven label amid a weakening US dollar
• The commodity broke out of the 1,220 – 1,180 trading range that had been in place since August. The 100-day moving average at 1,228.99 could act as near-term resistance
• The US dollar weakened as US yields eased off from recent highs following a strong 30-year auction and as investors rotating from stocks to bonds sought Treasuries

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