Equities Fall on Trade Talk Jitters

Orbex Market Flash

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FOMC Minutes in Focus

The US dollar has traded higher again so far today with the USD index printing 97.89 last. The FOMC minutes tonight are likely to add further upside support for USD. At the last meeting, the Fed signaled that it will remain on hold over the near term and traders are eager to learn the details of the discussion which led to the Fed’s decision. Recent data has seen US rate cut expectations weakening.

EUR Lower on USD Strength

EURUSD has been lower again today faltering under the strength of the resurgent USD. Flows remain light, however, as traders await the main focus of the week which is the October ECB meeting minutes tomorrow. We are also waiting for a speech from the new ECB chief, Christine Lagarde. EURUSD trades 1.1060 last.

GBP Weakens on Brexit Uncertainty

GBPUSD has been a little weaker today as uncertainty over Brexit continues to obscure sentiment. The upcoming December elections hold plenty of two-way risk for GBP. However, for now, the base case scenario remains that Johnson’s deal will be pushed through. That being said, the prospect of another hung parliament is a big driver of ongoing uncertainty. GBPUSD trades 1.904, as of writing, remaining just under the 1.3019 resistance level.

Equities Correct on Trade Talk Uncertainty

Risk assets have been softer today as the ongoing pause in US/China trade talks starts to raise doubts among traders. The two sides that yet to agree a new date for the signing of the phase one trade deal which was agreed upon in early October. While commentary around the talks remains positive, optimism is being tested here, seeing SPX500 retreat from recent highs to trade 3107.33 last.

Gold Higher

Safe havens have had a mixed session so far with gold trading higher against USD while JPY trades lower. Uncertainty over the progress of US/China trade talks is seeing fluctuation in risk flows. XAUUSD trades 1475.96 last, trading back up towards the 1481.93 level. USDJPY trades 108.44 last.

Crude Lower Ahead of EIA

Oil prices have been heavily lower over the last 24 hours on the back of the latest industry data. The API crude inventories report released yesterday showed that US crude stores were higher by 6 million barrels over the last week. Following a recent build in US crude stores, there has been a heightened focus on the health of oil demand.

Traders now look to the headline EIA report released later today. Should the EIA report confirm the surplus, oil prices are likely to trade lower again. Crude trades 55.40 last, having pierced the 55 level support on yesterday’s sell-off.

CAD Capped

USDCAD has been higher again today. The combination of USD gains and weakness in crude prices has weighed on CAD allowing USDCAD to trade back above the 1.33 level. Later today, the market will receive the latest Canadian CPI figures which hold the potential to see further CAD downside on any weakness.

AUD on the Ropes

AUDUSD has been weaker so far today as the sell-off in equities weighs on sentiment. Risk appetite has been a little weaker into the middle of the weak as ongoing uncertainty in US/China trade talks starts to take its toll. ADUSD trades .6089 last, as the correction lower continues.

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