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Wall Street in focus ahead of Exxon report

Five markets in focus today: Wall Street Cash, USD/JPY, Atlas Iron, ANZ and Facebook Inc.

Wall Street Cash (Dow Jones)

A record close, but the market still wants to see a move through the all-time intra-day high of 16631 (printed on April 4). In upcoming trade we get US manufacturing ISM and jobless claims, while on the earnings side, Exxon report. Exxon have a 4% on the index, so the bulls will be keen to see a good report.

USD/JPY

The BoJ has effectively confined USD/JPY to trade in a 101 to 105 range for the foreseeable future, and traders should be happy to play this range until either we see a substantial move higher in US bond yields, or the BoJ provide clear hints of further easing. In yesterday’s central bank meeting Mr Kuroda re-iterated his view that the economy is progressing well and showed no urgency to increase its asset purchases anytime soon. With this in mind we will need to see the USD side of the equation working better, so that means we will need to see a strong manufacturing ISM (expectations are for the index to move to 54.3) in upcoming trade.

Atlas Iron

It’s going to be a tough day for iron ore names and not only has the spot price fallen to $105.4 (down 2.6% on the day), Vale have also reported poor earnings in Brazil. Sentiment seems to be deteriorating in this space, so while contrarian investors may go down the Warren Buffett route of ‘buying when others are fearful’, short-term traders should trade in-line with sentiment and favour short positions. AGO has closed below trend support drawn from the June 2013 low; however there is still very strong horizontal support in the 88c to 90c area. While traders will be keen to watch the open of the rebar and iron ore futures market (on the Dalian exchange), I think it’s also really interesting to watch USD/CNH and USD/CNY as well, as both pairs continue to head higher and are fast approaching levels where the market will be feeling the falls in CNY are a reflection of real concern from Chinese authorities around the economy.

ANZ

ANZ have produced a solid 1H earnings result, with cash earnings growing 11% to $3.5 billion, just above expectations. The market should like the numbers.

Facebook

Facebook Inc has been added to Credit Suisse’s 'Focus List', so is now considered one of its top investment ideas. They have a $90 price target.

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