Dow Jones lifts, propelled by Powell’s comments

Fundamental outlook FED chair Jerome Powell commented that policymakers will be patient in terms of tightening rates, quelling fears of a possible rapid rate increment in the near future. On Friday, the Dow Jones market surged 800 points through the mid-day session.

US Secretary of Defense Jim Mattis tendered his resignation and is expected to leave the Trump administration by the end February. However, President Donald Trump instructed him to leave two months in advance, by the end December. Market economists are generally concerned about Trump’s erratic and egregious behaviour as there is no longer a senior ranked official staying in the White House.

After the US Government shut down since before Christmas, the House finally passed a Bill on Friday to fund eight Government Departments through to September.

However, the budget does not include the funding of the border wall as proposed by President Trump. It is still unclear now if Trump will approve of it or the House could get enough bipartisan votes to override the President’s veto.

TheUSeconomysawanincrease of 312,000 jobs in December, above median forecast.

China announced the cutting of banks’ reserve requirement ratio (RRR) by one per cent in January, in preparation for a possible economic slowdown and mounting pressure from the US tariff. The current RRR for large banks is 14.5 per cent and small banks at 12.5 per cent. Technical forecast US dollar/Japanese yen took a dip last week to a 10-month low at 105 as the dollar fell. The market rebound to 108.50 on Friday and remained there until a possible clearer trend in the coming week. We reckoned the trend has spearheaded into a bear sentiment and will drive lower in the coming weeks. Resistance will be strong at 109 region while first support lies at 107.30. If it goes below the aforementioned support, the next support area is at 104.50 to 105.

Euro/US dollar has been well FRANKFURT: The German Federal State of BadenWuerttemberg is seeking damages from Volkswagen after local authorities purchased VW diesel vehicles which now face bans in cities like Stuttgart, Frankfurter Allgemeine Zeitung said.

The value of diesel cars plummeted after German environmental groups scored a court victory last year that forced cities to consider bans of older diesel vehicles to bring emissions into line with European Union clean air rules. contained from 1.13 to 1.15 last week without much erratic movements. This week, we reckon the trend will be prone to test the topside range resistance. However, piercing above 1.15 will lead to the market going higher to 1.17 as the dollar tends to weaken.

British pound/US dollar is still threading sideways due to much uncertainties in the Brexit negotiations with the European Commission. We foresee little change in the market movement from 1.25 to 1.28. The trend will be prone to test the upside prices but selling pressure is equally strong. In case of an unexpected trade beyond 1.28, the bulls will attempt 1.30 but the chances are slim, for the time being.

Gold prices reached 1,298 per ounce on Friday before retreating. The trend will begin to consolidate for a while due to some profit-taking activity and the fund could head to crude prices for a technical recovery.

This week, we predict the prices of the yellow metal will stay high but it may not go beyond US$1,310 per oz. We expect the price movement to be contained from US$1,270 to US$1,310 oer oz with many profit takers ambushing the topside of the market.

WTI Crude prices began to recover with strong support building at US$43 per barrel. The trend may still do some sideways consolidation before advancing in the coming weeks. Over the near term, we foresee the support will be firm at US$45 per barrel. The weakening dollar and subsequent correction in the gold are possible upside catalysts for crude prices.

Crude Palm Oil (FCPO) Futures on Bursa Derivatives recovered slightly last week. Most of the general commodity have reversed higher due to the lower dollar. This week, we predict the trend will be sideways from RM2,130 to RM2,200 per MT with potential bargain hunting for bottom prices. A price surge could occur towards the end of the week.

Dar Wong is a professional in the financial industry based in Singapore with 30 years of global trading experiences. The expression is solely his own. You may reach him at dar@pwforex. com

Baden-Wuerttemberg sues VW for damages

The FAZ daily said state authorities filed a lawsuit with a court in Stuttgart at the end of last year, seeking damages totaling “low double digit millions”.

Volkswagen could not confirm this, and told Reuters the company had not seen the particular lawsuit.

But it added that previous court decisions had backed its stance that legal actions to seek damages are without merit given that VW cars had valid road certification at the time of sale. — Reuters