Morning Call. Market Overview for 01.09.2016

The DAX experienced profit taking on Wednesday, closing the day on lower levels. Latest inflation data from Japan showed that the country is still in the grips of deflation. The head of Japan´s Central Bank Kuroda, immediately signaled that the Bank of Japan will take use all means available to fight deflation. The Yen has risen strongly this year, in relation to the USD. The USD fell a to a level of slightly under 100 JPY/USD, this support being tested multiple times. Since the Japanese inflation data the Dollar has risen 3% towards the Yen. This could only be the beginning, in light of the Fed possibly raising rates and Japan expanding its monetary policy. A point of note is that hedge funds historically, have held large long position in the Yen against USD. A rising USD may force a hedge funds in to covering their positions, reenforcing the upward trend.

 

The DAX is in an upward trend. Next important resistance is seen at 10860, support at 10500.

 

The Euro is trading sideways in a large trend. Support is at 1,0822, resistance at 1,1429. Short term the Euro is in a downward trend.

 

 

The Yen is in an upward trend

 

Gold mid term, is now trending upwards, short term we are seeing a sideways move. The next major resistance is at 1375, support at 1300. Gold is showing some very short term weakness.

 

Oil is trending upwards.

The S&P 500 index lost 0.24% and Wednesday. Oil and Gas stocks dragged the index lower. A surprisingly large inventory build up in Oil reserves led to falling prices. Additionally, speculation that Iran will increase its Oil production, led to further pressure. This would be a very bad sign for September´s meeting of  major Oil producers in Algiers, should Iran decide to follow this path. The meeting will be held in relation Oil production caps. Asian markets began the new month with rising 

levels. The Hang Seng rose 0.56%, whilst Japan rose 0.53%. Ahead of today´s important US ISM data, the USD is virtually unchanged. Gold and Oil also start September on a stronger footing.