US equities traded mixed with the DJIA and the S&P500 closing relatively flat while the NASDAQ 100 printed fresh record highs as APPLE pushed higher, taking the companies market cap to the $800bln mark. Asian equites traded relatively flat, following Wall Street’s lead and the absence of major news except for the ASX 200 which lost 0.5% after Retail sales disappointed.
In FX, the USD held its gains overnight as buyers kept the USD Index, a measure of the strength of the USD against a basket of currencies, above the 99 level. Notable weakness was seen in the AUD which extended on its descent below 0.7400 on the back of worse than expected economic data. The JPY continues to soften as market sentiment continues to favor a risk on approach.
In commodities, gold could not hold onto early gains above 1235 and was dragged lower to the 1225 level where the new battle lines have been drawn. Technically, we are seeing a bullish head and shoulder formation taking place, and 1225 looks to be the right shoulder. If fundamentals align and we see a shift to a risk off stance, bulls will look to test 1235, breaking the neckline and exposing 1250. However, if the risk on sentiment intensifies, bears will capture 1225 and make a b-line for 1220, which would negate the H&S as traders continue to jump off the gold train.
Crude oil managed to hold on to its recent gains amid jawboning by both OPEC and non-OPEC members regarding the need to extend the supply freeze to beyond 2017. Though, slightly more confident of the talks, markets have failed to retest the $50 mark as we see $47 forming the cap for now. More supply constraint talks and lower API number today might be enough to push crude higher, but a failure to convince traders or a disappointing API draw, will see the commodity head south toward the $45 mark.