Australian Stocks Jump on Positive PMI Data 02/12/19

Australian stocks rose as the market reacted to the Chinese manufacturing PMI. The data was released by China Logistics and Caixin. The data from China Logistics showed that the manufacturing PMI rose by 50.2. This was the first time the PMI has been above 50 since April this year. This optimism continued early today when data from Caixin showed that PMI rose to 51.8. This was a slight improvement from November’s 51.7. These numbers show that the Chinese economy is rebounding after months of weakness. Meanwhile, quarterly data from Australia was relatively weak. Business inventories declined by 0.4% while business approvals fell by 8.1%.

AUS200 Technical Analysis

The AUS200, which is made up of the 200 biggest companies in Australia, rose to a high of $6890. This was a few points from the all-time high of $6900. The index has been rising sharply since November 21, when it was trading at $6634.20. This price is above the 14-day and 28-day moving averages while the RSI has moved close to 70. The momentum indicator has risen to above 100. The index may continue moving higher ahead of the RBA meeting tomorrow.

Crude Oil Price Rises Ahead of OPEC Meeting

The price of crude oil rose today ahead of the OPEC meeting that is scheduled for this week. This is an annual meeting that takes place in Vienna, Austria. Members take time to reflect on the crude oil prices and then commit to either cut or increase production. The Wall Street Journal reported that Saudi Arabia was seeking further supply cuts. This would help it boost prices as the country continues the Saudi Aramco IPO roadshow. This meeting comes at a time when the markets expect crude oil demand to reduce in the coming year.

XTI/USD Technical Analysis

The XTI/USD pair rose from a low of 55.00 to a high of 56.20. This happened after a significant decline on Friday, when the price fell from 58.15. The price is below the 14-day, 28-day, and 50-day moving averages. The price is between the 23.6% and 38.2% Fibonacci Retracement level. The average true range has risen sharply, which is a sign of increased volatility. The pair may see more volatility this week ahead of the OPEC+ meeting.

Sterling Falls as Campaign Continues

Sterling declined in the Asian session as the election campaign continues. The election, which is set to happen next week, will see Boris Johnson battle it out with Jeremy Corbyn. Recent polls give Boris Johnson and the Conservatives huge gains in Parliament. Just last week, a poll by YouGov, which is widely seen as the most accurate, said that Conservatives would get more than 350 MPs. The market will receive the manufacturing PMI from the UK later today. Other important data to watch will be manufacturing PMI from other European countries, Switzerland’s retail sales, and ISM manufacturing PMI data.

GBP/USD Technical Analysis

The GBP/USD pair declined from Friday’s close of 1.2940 to a low of 1.2910. This price is between the 50% and 61.8% Fibonacci Retracement levels. The price is along the 14-day and 28-day moving averages. The pair is also forming an ascending triangle pattern. The pair may see some volatility this week as the country prepares for election.