The XJO is expected to open modestly higher this morning, with US markets trading higher again on light volumes overnight.
Our market has drifted lower for the past two sessions, though movements have been small. With US markets drifting higher in that time, it is possible we see a little buying today.
There isn’t much in the way of economic data or scheduled events over the next couple of days, and volumes are likely to be very light, which could suggest we are unlikely to see dramatic movements.
Technically, our XJO is on an upwards movement but may have found some resistance around 7,550. This level would have to break for further gains to look likely. Given the strength of the recent upwards move, profit taking and a higher trough should be expected at some point.
US Markets
Equity markets closed higher overnight, with both the Dow Jones and S&P 500 up +0.4% and NASDAQ gaining +0.5%. Home prices in the US rose for a ninth straight month in October, increasing +0.6% MoM to reach a fresh record as buyers battled for a stubbornly tight supply of listings.
Asian Markets
Asian equity markets closed mostly higher overnight, with the Shanghai Composite down -0.7%, as China sanctioned a U.S. company and two human rights researchers over work related to Xinjiang, escalating a dispute between the nations over allegations of forced labor, with sentiment further hurt amid worsening tensions in the South China Sea with China appointing a new head of its navy.
The Hang Seng was closed for a holiday. KOSPI gained +0.1%, as data revealed South Korean consumers turned less pessimistic in December as inflation eased and exports improved.
Nikkei 225 pared some intraday gains to close +0.2% higher, as data which revealed the rise in Japan’s business service prices held steady at a three-decade high in November with services PPI rising +2.3% y/y, fueled speculation that the BOJ will inch its way toward normalizing policy in coming months.
According to reports by the Nikkei daily, Japan is drafting a new anti-monopoly law that seeks to rein in Apple Inc and Alphabet Inc’s control over app stores and payments.
European Markets
European equity markets were closed for a holiday.
WTI oil is trading at US$75.11 a barrel, as a move by the U.S. military to launch strikes on three installations in Iraq following a drone attack on U.S. troops, and Iran-backed Houthi rebels claiming responsibility for attacking a container ship in the Red Sea and vowing more strikes, provided the latest warning signs that the war in Gaza risks expanding into a wider conflict destabilizing the Middle East.
Iron ore price is at US$131.19 per ton.
Spot gold is trading at US$2067 per oz.
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Sam Green is the Portfolio Manager at Emerald Financial, whilst also being an Equities and Derivatives expert for his clients at TradersCircle.
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