Modest moves on FX and indies but some major moves in the commodity sphere – that’s the summary of Monday that started a Holiday-chopped week.
The calendar for Monday was relatively light with the 2 key readings both from the US: durable orders and new home sales. Both were below expectations and especially the orders missed the consensus significantly amid a major decline of defense aircraft orders. The reports were negative for the dollar but failed to impress markets.
The FX front was rather quiet with GBP being a loser and the BRL dominating the EM segment. In UK the Brexit reality begins to settle and investors cool their enthusiasm for the pound. The BRL gains on rumours that president Trump promised not to slap tariffs on Brazil’s steel. EURUSD looked very well positioned for a bounce but weak US reports translated only into a minor move.
Indices were barely moved with US tech showing no signs of cooling and pulling US100 and US500 towards fresh all-time highs. US2000 inched down a bit, perhaps reflecting more down-to-earth business expectations. Europe was mixed with UK100 gaining on weak GBP and ITA40 in the red. DE30 was stuck to 13300 pivotal level as the German market remains a bit reluctant to follow the US into euphoria.
NATGAS prices once again test the key $2.20 support. Source: xStation5
The commodity market was much more lively with Coffee and NATGAS down by 4% each and Zinc down by more than 2%. Coffee market remains very volatile as investors have nothing but speculation about a degree of next year’s deficit for now and although stronger BRL should be supportive, it wasn’t the case today. NATGAS prices suffer amid mild weather forecasts. Meanwhile precious metals rip higher with platinum gaining over 2% and silver over 1% showing increased interest among investors despite generally upbeat sentiment.