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UK Stocks Flat After BoE Decision
London’s FTSE 100 cut early gains to trade around the flatline on Thursday, after the Bank of England cut the bank rate by 25 basis points at its final meeting of the year, as expected. but reiterated their guidance for a “gradual” pace of further easing.
Markets are now pricing in about 62 points of easing from the central bank by the end of next year
DAX Edges Higher Ahead Of ECB Interest Rate Announcement
BRUSSELS (dpa-AFX) – Germany’s benchmark stock index DAX moved higher on Thursday in largely cautious trades as investors looked ahead to the monetary policy announcements from the Bank of England and the European Central Bank, and the inflation data, and personal consumption expenditure report from the U.S.
The BoE is scheduled to announce its rate decision at 7 am ET, while the ECB’s decision is due at 8:15 am ET.
The BoE is expected to lower interest rate by 25 basis points, while the ECB is widely seen holding rates steady.
The benchmark DAX was up 79.90 points or 0.33% at 24,035.61 about a quarter past noon.
Is Bitcoin Carnage Tomorrow? ‘Quad Witch’ Phenomenon
“Quad witching,” one of the most structurally risky days on the calendar, is approaching for Bitcoin. Neither superstition nor X numerology apply here. The price movement of Bitcoin has already been significantly impacted by this recurrent, derivatives-driven event this year.
Bitcoin’s time coming
Four times a year, in March, June, September and December, stock index futures, stock index options, single-stock options and index options all expire simultaneously. This phenomenon is known as quad witching. This corresponds with large BTC options and futures expiries in the cryptocurrency space.
Take a look at the figures. Bitcoin saw a 16.6% decline in March. It dropped an additional 8.5% in June. September’s percentage was 7.9%. The same timing, but different market conditions. Every sell-off was in close alignment with quad witching expiries. That is a forced resolution of positioning, not a coincidence.
GBPUSD pops on the 5-4 split. Sill below 1.34
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Newsquawk Daily US Opening News
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Forex Market Snapshot
- The dollar is trading firmer in cautious trading ahead to a slew of US data along with BOE (rate cut) and ECB (unchanged) rate decisions.
- EURUSD is down after coming within a hair of printing 1.1750 (high 1.17497) for the 6th day in a row, Support is at Wed’s 1.1702 low
- USDJPY has extended its rebound towards 156 despite expectations of a BoJ rate hike on Friday. Key resistance is at 156.16
- GBPUSD, the King if Whipsaw this week, is trading lower ahead of the BoE within a 1.33-1.34 range. Support starts at Wed’s 1.3311
- US stocks are trading up after yesterday’s selloff. How equities end the day is more important than how they start out.
- US bond yields ate lower.
Trump speech: No surprise, non event. Focus now shifts to an event filled day.
Click below for detailed previews
Newsquawk US Market Wrap
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Newsquawk US Stock Market Wrap
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NAS100 (NASDAQ) UPDATE
- It is hard to guess at the bottom in a last full week of the year liquidating type market, especially in the NAS which has led the equity market sell-off.
- Similar to US500, watch the daily chart pattern of 4 (red) down candles to see if it is extended.’
- With key support not until 23828, use the current low (24643) as initial support.
- Back above 24800 is needed to slow the risk, above 25000 to neutralize it.
NAS100 DAILY CHART
US500 (SP500) UPDATE
- What is clear as longs get squeezed in last week of the year trading, there is no reason to guess at the low until there is a reason to do so. In this regard, watch the daily pattern of 4 (red) down candles in a row to see if it is extended.
- Looking at the big picture, with next key support distant at 6495-6508, look for the current low (6719) to act as closest key support.
- On the upside, back above 6760 is needed to slow the risk, 6800+ to neutralize it.
US500 DAILY CHART
EURGBP UPDATE
- FX market torn between reacting to the risk off mood set by stocks and the gyrations in EURGBP that sent GBPUSD sharply lower after UK CPI only to reverse and send it back up. EURUSD following on both sides with a lag.
- 2-day range 8742-97
- Takeaway is price moves says something about liquidity as market is having trouble absorbing flows in this cross, especially on the component currency side (e.g. GBPUSD for the 2nd day.
EURGBP 1 HOUR CHART
BTCUSD (BITCOIN) UPDATE
- I am not sure what to say about something that moves up 4.5% and down 4.5% in 2 one hour candles so let the chart do the talking. I could also say this is a good example of when a stop is not a stop.
- What chart shows though is 90k is the key on top an 85-86K needs to hold to contain the downside.
BTCUSD 1 HOUR CHART
House to vote on ACA subsidies… would still need to pass the Senate and then signed into law by the President
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US500 (SP500) UPDATE
- Trying to stabilize but not out of the woods and dependent on 6800+ to cool the downside risk
- Only a firm move above 6831 breaks the current momentum.
- Otherwise, 6800 remains pivotal (above cools risk, below revives it).
- Still consolidation unless 6760 low is taken out.
US500 4 HOUR CHART
NAS100 (NASDAQ) UPDATE
- Two red support lines drawn off the low has potential to be a bottom or at least a pause but would need to move above 25398 to confirm and break current momentum. High so far 25263 so not confirmed.
- In any case, 25000 remains clearly pivotal (above cools risk, below revives it).
- Red line supports: 24928 ahead of 24820 (current low)
NAS100 4 HOUR CHART
Oracle says data centre deal still on
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