Bullet Report: Stocks extend losses while the Dollar is off its highs

Today’s economic release features GDP for Q3 in the UK. Markets will also focus on any hints for an OPEC deal as markets have started to lose faith in such a scenario. Yesterday, EIA oil data revealed undersupply, which helped push oil prices 2% after the data.

Currencies: Dollar retreated mildly yesterday, however chances for a December rate hike still remain above 70%. The dollar gained versus the JPY, reaching as high as 104.68 from 104, helped also by a rise in stock markets. GBPUSD continued to rebound for the 2nd straight day, trading above 1.2200 after touching an 18-day low of 1.2082 on Tuesday. The market will focus on the UK GDP data later for further direction. After touching a 7.5-month low of 1.0851 on Tuesday, the EURUSD has managed to rebound to 1.09. The AUDUSD which jumped 2 days ago, on the back of very good CPI data, managed to lose all its gains today with the pair trading at 0.7622 from 0.7715 yesterday. Overall there is some mild weakness monetarily for the USD, however the bias remains to the upside for the worlds most traded currency.

Stocks: US equities rebounded after a lower opening, and especially after oil surged 2%. he Dow Jones and S&P500 finished largely unchanged while Nasdaq declined -0.6% after some disappointing earnings results from Apple. Asian stocks today extended yesterday’s losses with Nikkei trading -0.5%. The picture is similar in European Stocks today with German Dax trading lower.

Oil and Gold: Brent crude price fell below $50 yesterday as the oil market continued to question whether there would be an OPEC deal to cut output when they meet on 30 November. US crude oil inventories declined 500k bl last week, but the news did not reverse the downtrend in the oil price. Gold was little changed as investors look to India for signs of increasing physical demand due to the upcoming Diwali Festival. Central banks have also been in the market, with Kazakhstan and Russia both increasing their gold reserves last month according to IMF data.

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