Fundamental Analysis 2017.09.26 – Market Overlook

Markets seem to be risk adverse at the moment, we are seeing investors running to safe-havens as the North Korean/US conflict continues.

Gold saw a jump to $1,300. This is likely a short term trend though, as markets are just waiting for tensions to abid.

The margin between WTI and Brent seems to hold at $7, as frictions also continue in Kurdistan. Brent is speculated to find resistance at the $60/barrel mark whereas WTI has broken through the $52 level.

The JPY has had slight gains as a safe-haven – largely due to its proximity to N. Korea and the political instability the country is experiencing at the moment. The Japanese Prime Minister Shinzo Abe seeks an impromptu election on October 22nd but to do so he first needs to dissolve the current government. At the moment this seems like a Theresa May move, he is attempting to consolidate his political power as polls are showing an increase of his popularity.

The NZD slipped 0.28% against the US dollar, as the ANZ business saw a significant drop in confidence this month. Post-election instability also contributed largely to this effect.

EUR/USD saw a 50-day SMA of 1.1865for the first time in 5 months. German election in combination with the Catalan referendum caused EUR traders to risk-off the one-currency. EURUSD should experience resistance at the 1.1895/1.1915 level

GBP is currently trading at 1.3450, hinting toward a need for the that dynamic to correct post-Bank of England (BoE) rally support is expected at 1.3400 and 1.3345.

EURGBP is currently trading at 0.8775. With the 200 MA set at 0.8740.

The FTSE should see a jump moving the index towards the 200-day moving average at 7338p.

This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.

STO Review