General Market Comment 18.01.19

General Market Comment

US indices closed higher to finish the week on Friday, as China reportedly offered a path to eliminate its trade imbalance, according to Bloomberg. Shares in the Consumer Durables & Apparel (+2.38%), Semiconductors & Semiconductor Equipment (+2.26%) and Transportation (+2.18%) sectors gained momentum. On the economic data front, industrial production improved by 0.3% MoM in December (estimated 0.2%) from a rise of 0.4% in November. Capacity utilization slightly increased to 78.7% in December (forecasted 78.5%) from 78.6% in the previous month. Finally, the University of Michigan sentiment index fell to 90.7 in a preliminary estimate in January (expected 96.8) compared to 98.3 a month earlier. The S&P 500 (2,670.71) stays above its 20d moving average (2,525.45 – flat slope) and 50d moving average (2,625.45 – negative slope).

European markets are expected to start on a flat note.

Foreign Exchange

The US dollar was bullish against all of its major pairs on Friday. On the economic data front, industrial production improved by 0.3% MoM in December (estimated 0.2%) from a rise of 0.4% in November. Capacity utilization slightly increased to 78.7% in December (forecasted 78.5%) from 78.6% in the previous month. Finally, the University of Michigan sentiment index fell to 90.7 in a preliminary estimate in January (expected 96.8) compared to 98.3 a month earlier.

The Euro was bullish against most of its major pairs with the exception of the CAD, the CHF and the USD. The UK retail sales declined by 0.9% in December (-0.8% expected) after a 1.3% rise a month earlier (revised from +1.4%).

The Australian dollar was lower against most of its major pairs except for the GBP and the JPY.

Commodities

After the close of Wall Street, WTI Crude Future (FEB 19) was up $1.8 to $53.85. The contract was above its 20D MA (@ $48.64) and above its 50D MA (@ $51.68).

Gold was down $10.7 to $1281.4. The precious metal was below its 20D MA (@ $1284) and above its 50D MA (@ $1252).

Copper Future (MAR 19) on Comex was up 3.4c to 271.35c/lb. The contract was above its 20D MA (@ 265.68c) and below its 50D MA (@ 271.78c). In Europe, the London Metal Exchange reported its copper inventories increased 125 tons to 135100 tons.