Daily Market Analysis – 19.09.2017
AvaTrade | Sep 19, 2017 03:56AM ET
The markets gained broadly on Monday as risk appetite remained strong, and investors shrugged off the potential for escalating tensions between North Korea and the U.S. In Asia, South Korea and Hong Kong made strong gains. Australia saw strength from the banking sector, but weakness from the mining sector kept a cap on gains as raw commodity prices began the week with softness.
European markets followed the Asian session higher with financial shares leading the way higher. In economic news, Eurozone inflation and core inflation were both reported in-line with expectations. London’s FTSE snapped a four session losing streak, rising higher as the Pound retreated following comments from BoE Governor Mark Carney that backtracked on a potential U.K. interest rate hike later this year.
U.S. markets saw a broad-based rally that saw the Dow and S&P 500 closing at new record highs, while the Nasdaq posted a smaller gain as technology shares pulled back in the afternoon. While worries about North Korea continue to recede, investor confidence is getting a boost from economic data supporting the thought that growth is coming, albeit slowly. This should keep markets moving higher for now, although the two-day Federal Reserve meeting, which begins Tuesday, could serve to cause some caution in the short-term.
h3 Today’s Assets/h3 h3 EUR/USD/h3Euro-Dollar continued a slow ascent on Monday, rising for the third day off the bullish candle printed last Thursday. With the U.S. Federal Reserve starting their two-day monetary policy meeting today we could see some caution in the market, the pair may remain fairly tight until the actual monetary policy announcement on Wednesday.
h3 USD/CAD/h3The pair gained more than 1% after the Bank of Canada official said that the BoC was not considering tightening interest rates at any time soon, and that rates were high enough already given the current economic growth. The upcoming U.S. Federal Reserve meeting likely played into the move somewhat as well, allowing USD/CAD to extend the rally that began last week, and could continue, especially as crude oil seems to have hit a wall at the $50 level.
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