Morning Call. Market Overview for 14.11.2016

The Big Picture

Interest Rates continue higher, accelerating since Donald Trump won the presidential election. The yield of 10-year US government bonds has risen from 1.85% to 2.21%. Since hitting lows of 1.35% this year, this constitutes a rise of ca. 1%. German 10 years government bonds have from -0.18% to 0.3%. Italian 10 years have risen even more, rising 1% from 1.04% to 2.02%. The reasoning behind this increase are proposed tax cuts and the US economic stimulus plans. Trump has not produced concrete plans on how these are to be financed. Internationally improved economic indicators and rising inflation are also putting upward pressure on yields. In Italy´s case, fear of December´s upcoming referendum also increasing rates.

DAX

The DAX is in a sideways trend.  Resistance is at 10820, support at 10250.

Euro / USD

The Euro is has broken out of its large sideways trend and is now trending down.

USD / JPY

The USD is in a downward trend

Gold

Gold has broken support and is in a downward trend

WTI Oil

WTI Oil is bottoming

Overnight:

The German stock market closed higher for the fifth consecutive day. The DAX closed Friday at + 0.26%. Largest gaining stock was Deutsche Bank, rising 4.57% in response to the strong US financial sector. Profit taking in Heidelberger Cement led to a drop of 4.36%. Allianz was able to gain 1.38% on good numbers, which were due to their life and health insurance sectors and additionally PIMCO showing a turn around. The University of Michigan indicator came in better than expected in the US. Rising 91.6 against analyst expectation of 87.9. The S&P lost 0.14%. The Nikkei 225 starts the week up firmly at + 1.61%. The USD trends higher, whilst Gold weakens. WTI Oil is down -0.18%

Economic Data:

• No relevant data

Quarterly Results:

• Germany: RWE

RoboForex Analytical Department