The Bullet Report: Stocks at record highs & Gold at 3 week lows ahead of ECB (Forex.info)
Overnight, the USD continued to hover near four-month highs against the other major currencies on Wednesday, as global growth concerns still weighed on market sentiment and as trading volumes were expected to remain light with no major U.S. data due throughout the day. Today, the market will focus on the ECB meeting (rate announcement & press conference).It is not expected to ease monetary policy before the September meeting but a dovish rhetoric is expected. In the UK, retail sales are expected to be released while US initial jobless claims can also spark some volatility this afternoon.
Currencies: Overnight, the NZDUSD tumbled from 0.7025 to 0.6950 as the Central Bank noted that another rate cut in August could be needed. USDJPY is marching higher, reaching highs of 107.50 so far on the back of the super positive stock market sentiment globally right now (it correlates with stocks). Yesterday, GBPUSD also moved higher by 200+ pips as UK data revealed that inflation is picking up in the UK. It gave back almost half the gains and now consolidates around 1.3225 region, awaiting fresh info from the upcoming UK retail sales data for next direction. EURUSD managed to recover from 2 week lows of 1.0980, however remains heavily under pressure and could be sold off significantly should the ECB today announce measures.
Stocks: Asian stocks climbed to nine-month highs on Thursday, helped by a pickup in capital inflows and a recovery in global oil prices. Leading regional gainers was Japan’s Nikkei stock index which rose 1 %, helped by the weakened JPY. Meanwhile in the US, stocks closed at record highs after trading within a narrow range Wednesday, buoyed by a surge in tech stocks after a flurry of corporate earnings beat lowered expectations.
Oil and Gold: Crude oil extended gains in the Asian session. Brent crude was slightly higher in Asian trading at $47.35 a barrel, after settling up 1 %, while U.S. crude edged 0.2 % higher at $45.86 after adding 0.7 % overnight. GOLD edged down 0.1 % to $1,314.08 an ounce after falling to 3 week lows on Wednesday.