21 Nov: US Stocks -2%, WTI -7%, US$ firmer. Italian budget proposal to the EU the main focus ahead. US D/G later.

By | November 21, 2018

It has been another day of red, particularly for the stockmarkets, which has seen the major US indices close down by around another 2% and heading back to flat on the year, and oil, where WTI collapsed by 7% because of a growing conviction that the Dec 6 OPEC Meeting will be a non-event. Stocks fell on the back of the plunging oil price, which hit energy companies, while the tech sector continued to fall sharply, with Apple once again leading the way, down 4% and now 23% off its recent highs.

The US$ regained some of its recent lost ground as it took on a safe-haven status while traders “de-risked” elsewhere, and is generally higher despite US yields remaining heavy on the day. In the short term, further strength would not really surprise. The metals are mildly lower in the face of the dollar’s strength.

Looking ahead, all eyes today will be on the EU Commission’s response to the revised Italian budget which looks set to end in deadlock and would appear to keep a cap on the Euro, while the other major focus of the session will be on the US Durable Goods Orders. These are expected to decline 2.1% but core capital goods are seen to lift 0.2% following Sep’s 0.1% decline. Before then, the WBC Australian Leading Index is due for release, while from Europe we get the UK Public Sector Net Borrowing Requirements. UK PM Theresa May will be meeting the EU President JC Juncker and is likely to produce more Brexit headlines. Later on form the US, aside from the Durable Goods, the Existing Home Sales, Michigan Consumer Sentiment Index and the EIA Crude Oil Stocks Weekly Change are all due.

Economic data highlights will include:

Wed: NZ Credit Card Spending, WBC Leading Index, EU decision on Italy, UK Public Sector Net Borrowing Requirements, US Durable Goods Orders, Existing Home Sales, Michigan Consumer Sentiment Index, EIA Crude Oil Stocks Weekly Change

CURRENCIES
EURUSD: 1.1365
Res  1.1400  1.1435  1.1470
Sup  1.1360  1.1320  1.1270
USDJPY: 112.75
Res  112.90  113.10  113.40
Sup  112.55  112.30  112.00
GBPUSD: 1.2780
Res  1.2815  1.2850  1.2885
Sup  1.2755  1.2725  1.2690
USDCHF: 0.9950
Res  0.9960  0.9980  1.0005
Sup  0.9935  0.9910  0.9885
AUDUSD: 0.7218
Res  0.7230  0.7250  0.7270
Sup  0.7210  0.7195  0.7180
NZDUSD: 0.6791
Res  0.6810  0.6835  0.6860
Sup  0.6785  0.6765  0.6745
INDICES / COMMODITIES
S&P.fs: 2642
Res  2650  2665  2680
Sup  2635  2620  2605
DJ30.fs: 24469
Res  24610  24775  24940
Sup  24400  24250  24075
SPI200.fs: 5619
Res  5635  5655  5675
Sup  5600  5585  5565
XAUUSD: 1221
Res  1225  1230  1235
Sup  1215  1210  1205
XAGUSD: 14.30
Res  14.40  14.50  14.60
Sup  14.25  14.15  14.05
WTI.fs: 53.43
Res  54.30  55.25  56.10
Sup  52.75  52.15  50.60