Surging Stocks, Sliding Gold Sets Tone For November

At the beginning of October, fears that the Fed’s quitting on easing may dry up the market dominated opinion. Now the fears are easing as central banks are injecting funds into markets by turns. As the Fed is no longer playing in this field, the BOJ has placed bets on the game. Participants were shocked by BOJ’s unexpected easing policy to expand the Japanese monetary base by 80 trillion each year.

The yen slumped by 2.94% last Friday and by 3.7% in the last week. The Dollar Yen rose to 112.32, the highest level since 2008 and 8.4% higher than it was six months ago. Now that the market understands the determination of BOJ there will certainly be more space open for the Yen’s depreciation. The long term target level for the Dollar Yen can be probably set beyond 120.


In other astonishing news – on Friday, gold prices fell below the year bottom level of $1180. The Gold price plummeted down 2.7% following two straight falling days to $1172 per ounce. The day low was $1161 at the lower band of the channel. The breakout has signalled another major fall on gold prices like that slump of April 2013 when gold lost $250 in just three days of trading.


The global stock markets seemed inspired by the BOJ decision. The Nikkei Stock Average rocketed by 755 points or 4.83% to 16414. The Shanghai Composite also surged by 1.22% to 2420. ASX 200 gained 0.92% to 5526. In the European stock markets, the UK FTSE was up 1.28%, the German DAX edged up 2.33% and the French CAC 40 Index gained 2.22%. The US market refreshed an all-time high following the European and Asian markets. The Dow and S&P 500 has risen 10% from their October bottom and NASDAQ reached its newest high since 2000. The S&P 500 gained 1.17% to 2018. The Dow rose by 1.13% to 17390, while the Nasdaq Composite Index surged by 1.41% to 4631.


On the data front, Australia Building Approvals will be released at 11:30 am. Chinese HSBC Final Manufacturing PMI will be out at 12:45 AEST and UK Manufacturing PMI will be at 20:30 AEST.

Have a great trading day!
Anthony