Currencies

Head & shoulder break still intact

At the beginning of the week, the market was hoping the bill could pass the Congress before Thanks giving, but now there are doubt there's actually a bill to discuss. The Senate tax-reform proposal has strong divergences with the one debated in the House, as senators are more focused on helping the middle class, something that the previous version over looked. Due to these concerns voting got delayed to this coming week. As per the US treasury Secretary he is confident of reconciling the differences and positive that will get the tax bill to Trump in December.

Technically, with the failure to close above the neck line of head and shoulder pattern on the daily chart can bring the prices back down.

Bearish RB Atone

The RB As lightly downgraded its outlook for economic growth in Australia while signaling only a gradual rise in headline inflation. In its quarterly statement on monetary policy, the central banks aid it sees growth in December 2017 of 2.5 percent easing back from 2 to 3 percent in the previous forecast issued in August. Additionally, in December 2018, the RBA sees economic growth of 3.25 percent, down from a previously forecast peak of 3.75 percent. The RBA also forecast the economy growing at a solid pace over the next few years due positive labor market developments. However, the RBA is more concerned about inflation and wages growth with the central bank warning that both will rise only gradually over time.

We are bearish on AUD/USD.

 

Equities

Chinese GDP data supports Hong Kong 50

China's economy grew 6.8% between July and September slowing slightly from the previous quarter. However, the growth rate, which compared expansion with the same three months in the previous year, met forecasts. The latest GDP figures are still above Beijing’s annual growth target of 6.5% for 2-17. Growth has been supported by higher than-expected rise in trade and bank lending. Technically Hong Kong Index is t4esting if it can stay above the 29,000 point level. The gauge was likely to consolidate around that level unless Ten cent’s third-quarter earnings, due next Wednesday, are far beyond expectations. Overall the index continues to be in uptrend.

German data continues to impress

German economy continues to do well in 2017, and retail sales, the primary gauge of consumer spending, rebounded sharply by 0.7% after two straight declines, and marked the strongest gain since February. Markets are hoping for stronger consumer spending in the fourth quarter.

Also German coalition talks are gaining steam, as President Angela Merkel has convinced potential partners to drop key demands. After intense negotiations, the Greens have dropped a demand on the phase-out of fossil fuels. The FDU wanted to lower taxes by 30-40 billion euros, but has agreed to more moderate tax cuts. If the talks continue to progress, Merkel could have a government in place in December.

We retain our bullish stance on Index due these developments

Strong earnings top rope lindex higher

Third-quarter results continue to surprise to the up side. As of Nov.6, about 80% of S & P 500 companies have reported third-quarter results. On balance, companies are reporting broad-based global economic expansion, with recent weather having a significant localized impact but an overall limited effect on the U.S. economy.

In general, energy, information technology, and materials sectors are exhibiting the highest year-over-year earnings growth. The strong Y/Y increase of the energy sector is off of low comparisons following the plunge in oil prices in early to mid-2016. The 20%-plus increase in IT earnings is perhaps most indicative of economic expansion and increasing capital-expenditure out lays. It is hard to envision the broad equity market experiencing a meaningful pull back while IT exhibits strength.

We believe the index continues to be on the buy side.

Invest in the leader of DMD treatment

Sarepta Therapeutics has moved to solidify its position as the leading company in the treatment of Duchenne muscular dystrophy (DMD) with the recent announcement of three new clinical trials.It also acted to pad its already ample cash position with a $475 million convertible bond issue Wednesday that should lift its total cash to more than $1 billion.

And Thursday Sarepta scored a win when Anthem (ANTM), the big health insurer, eased restrictions on its coverage of the company’s DMD drug by agreeing to pay for it in the treatment of ambulatory patients. Sarepta also said it plans to begin a phase 1/2a trial for gene therapy designed to produce a form of dystrophin and potentially help 60% to 70% of the DMD population.

The latest developments look bullish for the company.

 

Metals

Tax Reform: A make or break event

US Treasury Secretary Mnuchin has stated that they are on track to get tax bill to Trump in December. He also added that there were only minor differences between House & Senate tax bill and was very confident about reconciling differences between the tax bills. These events could turn out to be bearish for Gold.

Technically, Gold markets initially tried to rally during the week, but turned around to form a shooting star. This of course is a negative sign, especially considering that the previous candle was a shooting star. A breakdown below the bottom of the candle for the week should send this market looking for support below, closer to the $1250 level.

Bull Bat Harmonic pattern

The Bull Bat Pattern is a reversal pattern composed of four legs, X-A, A-B, B-C and C-D. It is a reversal pattern that allows you to enter the market at extreme highs and lows. It helps you identify when a current price move is likely approaching its end. This means you can enter the market as the price reverses direction. Using Fibonacci levels applied from point X back to point A, the price is expected to reverse from 0.8*86 of XA or 1.618 from CD. To find B, the Fibonacci levels from X to A are inserted and B is formed at 0.382 or 0.50. To find point C, the Fibonacci levels from point A to point B are inserted and point C will be formed between 0.382 or 0.886

Fibonacci ratio of the AB leg. Once point C is formed, D is approximate 1.618/2.618 of BC or it can be 0.886 of XA.

As the pattern is completed at point D or the zone in which reversal may occur, one can start taking the position as the trend is set to change.

 

Energies

Huge rise in Oil rigs

The week began with crude oil futures underpinned by expectations that the OPEC-led agreement to cut production would be extended beyond the March 2018 deadline. This event has been driving the market higher for several weeks. Concerns that the market was overbought were eased a bit early last week when prices surged to the upside due to geopolitical events in the Middle East. Major arrests in Saudi Arabia due to a crackdown on corruption and an escalation of tensions between Saudi Arabia and Iran helped drive prices to nearly a two-year high. According to the U.S. Energy Information Administration, U.S. crude oil stockpiles rose unexpectedly during the week-ending November 3. The move was fueled by a jump in imports and a plunge in exports. U.S. production also hit its highest level since at least 1983.

Oil services firm Baker Hughes reported U.S. drillers added 9 rigs bringing the total up to 738.

 

About Century Financial Brokers

Established in 1989, Century Financial Brokers L.L.C.is the region’s leading financial brokerage firm and a well reputed online trading service provider in the United Arab Emirates. Since inception, Century continues to have a strong commitment and dedication towards providing superior and personalized customer experience, and empowering its customers through education, training and support, in line with the values and beliefs of its founder, Mr. Sulaiman Baqer Mohebi, a dynamic and visionary business leader.

Century operates on the world’s leading platform which also provides a wide-range of financial instruments, covering 6 asset classes, across 100 markets worldwide with products ranging from Currencies, Commodities, Indices, Metals, Energies, and Inter-Bank Money Markets for both local and expatriate investors, to meet their diverse trading and investment needs.

 

Source: Matrix PR