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Overview: Risk assets up but much caution with central bank announcements today and US jobs reports Friday.
STOCKS: US: Up: A better-than-expected ADP Employment ISM Service report results lifted stocks, and a late buying surge pushed the major averages beyond recent ranges and gave the S&P 500 its first decisive close above its 200 day SMA this year. Friday’s jobs reports will likely determine if US stocks can sustain the move.
US Bonds: Down as stocks rise: Benchmark US 10 year bond prices fell, yields rise from 2.9140% to 2.9520%.
Asia Stock Outlook: Up: Asian stocks mostly higher Thursday on solid corporate earnings, from the likes of Toyota Motor and chipmaker UMC, and upbeat U.S. economic data that lifted the US Dollar.
European Stock Outlook: Up – opening higher but cautious ahead of ECB, BoE announcements today, US jobs reports tomorrow.
Crude Oil Daily Outlook: Down in early Thursday trade as it backs off of multi-month resistance of $82.50 despite larger than expected inventory draw downs and rising stocks.
Gold Daily Outlook: Flat: Gold futures unchanged from yesterday’s close in early Thursday trade GMT
FOREX Daily Outlook Wednesday and early Thursday trade GMT: Overall bias to risk currencies with exceptions, USD catching a bounce on good data raising hopes for a better NFP report Friday, NZD weakest today on disappointing quarterly jobs data, lowering expectations for future rate increases.
US Dollar Daily Outlook: Up vs. the EUR, GBP, JPY, CHF (though giving back some of yesterday’s gains thus far early Thursday vs. the JPY and CHF), AUD and NZD, down vs. the CAD ISM, ADP and Challenger reports suggest a stronger private sector payrolls
Euro Daily Outlook: Down vs. the USD, JPY, CAD, AUD up vs. the CHF (but giving back some of yesterday’s gains today), GBP, NZD. ECB press conference could spark some volatility if surprises on rate expectations. EUR likely to keep uptrend as long as bond sales continue and no major positive USD news.
Yen Daily Outlook: Down vs. all except up vs. the NZD, as recent gains leave the USDJPY at 15 year highs and rising stocks combine to give the Yen rally a break thus far over the past day. Expect more JPY strength ahead as BOJ intervention threat remains low and risk assets appear vulnerable to pullbacks
British Pound Daily Outlook: Down vs. the USD, JPY, CAD, AUD up vs. the CHF (but giving back yesterday’s gains on the CHF thus far Thursday), NZD, flat vs. the EUR. Showing resilience despite weaker data and rising USD, suggesting the GBPUSD may soon again try to breach 1.6000 resistance, especially if US jobs weak.
Australian Dollar Daily Outlook: Up vs. the CHF (though giving back some of yesterday’s gains Thursday) EUR, USD (though giving back gains thus far Thursday), NZD, JPY, down vs. the GBP, CAD. The AUD is benefiting from its much better than expected trade balance report, confirming the picture of robust growth despite a pullback in consumer spending
New Zealand Dollar Daily Outlook: Down vs. all (except flat vs. the CHF) despite risk in risk appetite on much worse employment report, as the recent rate increase had markets anticipating improvement
Canadian Dollar Daily Outlook: Up vs. all
Swiss Franc Daily Outlook: Down vs. all except flat vs. the NZD
Multi-Day Trade Ideas From Daily Charts
EURUSD: BUY on break above 1.3200 take profits just before 1.3300 stop loss around 1.3188, SELL on bounce downward off of 1.3200 resistance take profits just before retest of 1.3100. Struggling to hold 1.3150 support
Daily Trends To Watch – Caution ahead of ECB, BOE rate comments today, US NFP Friday
Rising: Gold rising and approaching major resistance at 1200,
Falling: EURUSD testing 1.3200 support, NZDUSD falling, testing major support, ditto other commodity dollars vs. the USD, crude oil coming off strong resistance around $82
Watching For Reversal: S&P 500, as it struggles to sustain a move above its 200 day moving average around 1116 AND avoid confirming BOTH a bearish ‘head and shoulders pattern’ from January to mid-June AND a double top from June 16th and August 8th tops. Same goes for other major indices.
DISCLOSURE: NO POSITIONS