Dow futures declined during the Asian session as the market reacted to the new news from Boeing. In a statement, Boeing said that it would suspend production of the 737 Max plane. The news was a confirmation of a Wall Street Journal scoop that cited people with knowledge on the information. The company has been producing 40 planes every week. The company, which is an important component of the Dow Jones Industrial Average, has been in turmoil since March last year when an Ethiopian jetliner crashed. The FIA then grounded the jet and restarted its certification. This has impacted the US economy by denting exports and durable goods orders.
The Australian dollar declined after the RBA released its minutes for the last meeting. In the statement, the bank signalled that it may be forced to slash interest rates in February. This will be the fourth rate cut in 12 months. Members acknowledged that the country’s spending freeze could lead to a lag in monetary policy. They also noted that the policy had long and variable lags and that most customers would take time before increasing their spending. This could change depending on how the truce between the US and China works. A truce would be beneficial to the Australian economy, which counts China as its biggest market. This week, Josh Frydenberg, Australia’s Treasurer lowered the growth forecast for 2019/20 to 2.25% from 2.75%. He also said that wage growth would not reach 3% until 2022/23 while the unemployment rate would rise to 5.25%.
The market will focus on the United Kingdom, which will release the November employment numbers. The unemployment rate is expected to increase slightly from 3.8% to 3.9%. The claimant count change is expected to have declined from the previous 33.0k to 21.2k. The average earnings index plus bonus is expected to have declined from 3.6% to 3.4%. Earnings ex-bonus are expected to have declined from 3.6% to 3.4%. These numbers come less than a week after Boris Johnson’s resounding election victory. The market will also receive car registration data from Germany. Meanwhile, the market will receive the building permits, housing starts, Redbook, industrial production, manufacturing production, and JOLTs job openings data from the United States.
EUR/USD
The EUR/USD pair was relatively unchanged during the American and Asian sessions. The pair is trading at 1.1147, which is slightly above yesterday’s low of 1.1133. The pair has formed a symmetrical triangle pattern, which is a sign of consolidation. The pair may continue this consolidation today as the triangle nears its peak. If it does, the pair will see a significant breakout in either direction soon.
US30
The US30 futures declined to a low of $28,222 as the market reacted to the disappointing news from Boeing. The price still remains a few points below the all-time high of $28,366. On the hourly chart, the price is along the middle line of the Bollinger Bands while the momentum indicator has moved lower. The signal line of the MACD has been moving lower. The index may move lower to test the $28,200 support later today as the market reflects on the Boeing news.
AUD/USD
The AUD/USD pair declined to a low of 0.6860 as the market reacted to the RBA minutes. The pair has been declining since last week when it reached a high of 0.6938. The price is below the 14-day and 28-day moving averages while the RSI has been moving downwards. The current price is along the lower line of the Bollinger Bands. The pair may continue moving lower, in continuation with the trend.
