Today’s European and North American trading sessions were quite mixed in the end with a number of cross currents influencing trading. Overall, the response to US midterm election results from the street was favourable with the Republicans winning control of the Senate and keeping their House majority. US stocks spent much of the day in positive territory and the Dow rallied to a new all-time high. Indices continue to have a case of bad breadth, however, as the S&P closed near its previous peak, the Russell 2000 remains in an established downtrend of lower highs. The NASDAQ finished down slightly on the day. Although Apple and Alibaba continue to trade at or near all-time highs, some technology momentum plays could come under pressure tomorrow after Tesla, Qualcomm and Symantec all came in soft on guidance. USD staged an explosive rally on a combination of the election results and more dovish comments yesterday from Bank of Japan Governor Kuroda who maintained his commitment to getting inflation up to 2%. The rally sent gold sharply lower in early trading although it did manage to rebound after finding some support near $1,140. Copper, silver, platinum and other metals also plunged, dragging AUD down the drain with them and NZD down in sympathy. Increased stimulus in Japan and a weaker than expected Eurozone retail sales report have put more pressure on the ECB to accelerate its own stimulus/asset purchase program. European indices rallied on speculation that the ECB may do more at tomorrow’s meeting but sentiment could change depending on the results and particularly comments at President Draghi’s press conference. EURJPY has been soaring lately and could be particularly active right through the ECB news. The Bank of England meeting may also attract some interest in GBP as traders try to figure which out of the BoE or Fed is more likely to raise interest rates first. The crude oil market stabilized today with WTI consolidating in the $77-$80 range. A better than expected US inventory report helped to shore up support and also took some pressure off the oil-sensitive CAD and NOK. Traders didn’t react much to the ADP payrolls or US Service PMI reports which showed the US economy continuing to speed along but not growing too fast either. These reports now set the stage for Friday’s US nonfarm payrolls and Canada labour force reports. Up first, however, is today’s Australian employment report. A rebound from last month’s drop is widely expected and traders may also be interested in seeing if full-time employment holds up. A positive report could help to shore up support for AUD while another decline could weigh heavily on already fragile sentiment. Corporate News Tesla Motors $0.02 vs street $0.01 on sales of $932M beating street $892M. 2014 delivery guidance for 2014 cut by 5-7% to 33,000 cars, Model X launch delayed several months to Q3 of 2015. Symantec $0.48 vs street $0.42, guides next Q EPS to $0.47-$0.50 vs street $0.50 Qualcomm $1.26 vs street $1.32, guidance next Q $1.18-$1.30 vs street $1.43, guidance FY $5.05-$5.35 vs street $5.60. Economic News Significant announcements released overnight include: US ADP private sector payrolls 230K vs street 220K vs previous 225K revised up from 213K US Markit service PMI 57.1 as expected US ISM non-manufacturing PMI 57.1 vs street 58.0 US crude oil inventory 0.4 mmbbls vs street 2.3 mmbbls Eurozone retail sales 0.6% vs street 1.4% Upcoming significant announcements include: 11:30 am AEDT Australia employment change street 20K vs previous (23K) 11:30 am AEDT Australia full-time jobs previous 21K 11:30 am AEDT Australia part-time jobs previous (51K) 11:30 am AEDT Australia unemployment rate street 6.2% 10:00 am AEDT NZ house prices previous 6.4% 4:00 pm AEDT Japan leading index street 105.5 7:00 am GMT Germany factory orders street (1.0%) 8:00 am GMT UK Halifax house prices street 9.1% 9:30 am GMT UK industrial production street 1.6% 9:30 am GMT UK manufacturing production street 2.8% 12:00 pm GMT UK monetary policy decision no change to interest rate or QE expected 12:45 pm GMT ECB monetary policy decision no change to interest or deposit rate expected 1:30 pm GMT ECB President Draghi press conference 3:00 pm GMT UK GDP estimate previous 0.7% 8:30 am EST US jobless claims street 285K 10:00 am EST Canada Ivey PMI street 57.3 10:30 am EST US natural gas street 86 BCF FOMC members Evans, Powell and Mester speak through the day
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