FOREX 4 minutes to read

NY Open: Wall Street rebounds

Summary:  US equities have seen a strong opening, helped by news of a major takeover and hopes of a strong Facebook result. FX markets, meanwhile, are whippy, with the dollar alternating between gains and losses.


Wall Street is dancing the Texas two-step, as in two steps back and one step forwards. The Dow Jones Industrial Average dropped 316 points on Friday and opened today with a gain of 248.75 points. IBM’s planned takeover of Red Hat Inc (RHT: NYSE) for $54.0 billion is supporting prices. The S&P 500 and Nasdaq started the week with a 1.4% gain as well, but the sustainability of these gains is questionable. All three indices added to their gains as of 14:00 GMT. Facebook (FB: Nasdaq) reports quarterly earnings tomorrow. Hopes for a strong report are tempered by the soft results posted by Alphabet (GOOGL: Nasdaq) and Amazon (AMZN) last week.

The US is upping the number of troops it is deploying to the Mexican border, from 800 to 5,000, says the Wall Street Journal. The move is to prevent up to 5,000 men, women and children from crossing into the US, illegally. Financial markets are not concerned.

September US Personal Income data was 2.0% a tad softer than the 0.3% forecast, but the bad news was offset by the upwardly revised 0.4% result for August. Personal spending was as expected. 

FX markets have been whippy. The US dollar alternated between gains and losses since the New York open, but as of 14:00 GMT, dollar bulls have prevailed. The greenback is higher across the board, led by a drop in the Japanese yen.

EURUSD topped out at 1.1415 just before breakfast and is testing the overnight low. The news of German Chancellor Angela Merkel’s upcoming resignation (in 2021, when her current term ends) is another Eurozone negative to go along with Brexit and the Italian budget debate. The EURUSD technicals are bearish below 1.1470 which is guarded by an intraday downtrend line at 1.1415. A break below 1.1340 targets 1.1290. 
EURUSD, 4-hour. Source: Saxo Bank
Disclaimer

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)