Morning Trading Notes Dec 15: Resource Currencies Rally as Commodities Climb

December 15, 2017, 7:15 am EDT

Just as stocks are starting to show signs of exhaustion, trading action in commodities and resource currencies as been heating up overnight. After weeks of steady declines, gold and silver have started to bottom out ahead of Bitcoin’s debut on the CME Monday. Meanwhile, Copper continues to recover, Natural gas appears to be forming a floor, and crude oil has stabilized at a higher level.

Overall, sentiment toward the global economy and the outlook for resource demand remain favourable. Political initiatives continue to move forward as well. In the US today the Republicans are expected to announce details of the final tax reform bill they hope to pass by the end of next week. Meanwhile, in Europe, EU leaders are expected to approve moving forward to the next round of Brexit talks on future trade relations at today’s European Council meeting.

Resource currencies have been rallying on the back of rising commodity prices. AUD and NZD are leading the charge by breaking out of bases, while CAD is starting to play catchup. ZAR is climbing ahead of this weekend’s ANC meeting where the governing party is expected to pick a new leader to replace Jacob Zuma.

In earnings overnight, Costco beat the street by a mile reporting EPS of $1.45, way above the $1.35 street estimate as same store sales jumped 10.5% and online sales spiked 43%. COST shares rallied above $190 in aftermarket trading. Oracle beat the street slightly reporting EPS of $0.70, slightly able street $0.68, but shares fell in aftermarket trading last night.

There are a few economic announcements still to come today, including US Empire Manufacturing at 8:30 am EDT, US industrial production at 9:15 am EDT and the US Baker Hughes weekly drill rig count at 1:00 pm.

 

This article is intended as general market commentary, based on sources considered to be reliable but could contain unintended errors. Commentary, estimates and charts are provided for information, education and entertainment purposes. They are not intended as and should not be construed in any way as investment advice. The authors assume neither liability nor credit for returns from readers’ trading or investment activity. We do not accept any remuneration from companies mentioned in this report. The authors or related parties may enter or exit short term trading positions in markets mentioned in this report at any time without notice. Some of the charts used in this commentary are based on Forex and Contracts for Difference (CFD) markets; leveraged products which carry a higher degree of risk and may not be suitable for all investors. CFD trading is not available in the United States of America. Copyright 2017 The Fundamental Technician, all rights reserved.

1 thought on “Morning Trading Notes Dec 15: Resource Currencies Rally as Commodities Climb”

  1. Thanks for the direct connection, Colin. Excerpts from your Morning Comment will be used on my blog to support/connect to your site.

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