Australian Stocks Soar in Aftermath of Westpac Scandal 22/11/19

Australian Stocks Soar in Aftermath of Westpac Scandal 22/11/19

Australian stocks rose today as the markets continued to react to the latest revelations by Westpac bank. On Wednesday, the bank announced that it had failed to enforce money-laundering rules. This led to more than 23 million breaches of AML and counter-intelligence laws. The bank is facing both legal and political pressure as the crisis escalates. The market has also focused on the problems facing Harvey Norman, which is one of the biggest retailers in the country. The company’s board has been accused of mismanaging the company and making non-core investments that have eroded shareholder value.

AUS200 Technical Analysis

The AUS200 index declined to a low of $6634 as new revelations by Westpac emerged. The index has made some recovery and is now trading at $6710. On the hourly chart, the index is trading along the 38.2% Fibonacci Retracement level. The price is slightly above the 14-day and 28-day moving averages. The RSI has been moving upwards and has reached a high of 55. The index may continue moving upwards to a high of $6735.

US Stocks Dip for Third Straight Month

US stocks declined yesterday as the market continued to digest the current progress on trade. The market has been concerned by the slow pace of negotiations. It is now six weeks after the two countries announced a preliminary deal yet nothing substantial has happened since then. Meanwhile, the consolidation wave continued yesterday as two of the biggest brokers announced a potential tie-up. Charles Schwab announced that it would acquire TD Ameritrade in a transaction that will create a company with more than $5 trillion in assets. This announcement came a day after PayPal announced it would acquire Honey, a coupon company.

US500 Technical Analysis

The US500 index struggled yesterday as markets waited for more news on trade. S&P500 futures are trading at $3107, which is slightly above the week’s low of $3090. The index is trading between the middle and upper line of the Bollinger Bands. The RSI is at the neutral level of 50 while the signal line of MACD is attempting to cross the neutral line. The index may breakout in either direction depending on trade news.

Is the European Economy Recovering?

Focus will be in Europe today where the markets will receive the latest economic data. The German statistics office will release the second preliminary reading of third-quarter GDP. Data is expected to show that the economy improved by an annualised rate of 0.5% and a QoQ rate of 0.1%. This will be higher than the previous increase of 0.3% and decline of -0.2% respectively. Markit will then release flash PMI data for November. In Germany, the manufacturing PMI is expected to increase from 42.1 to 42.9 while services PMI is expected to increase from 42.1 to 42.9. The European Union manufacturing PMI is expected to increase from 50.6 to 50.9.

EUR/USD

The EUR/USD pair declined to a low of 1.1052 during the Asian session. The pair is now trading at 1.1062, which is along the 61.8% Fibonacci level on the hourly chart. The price is along the 14-day and 28-day moving averages while the average true range has been easing. The money flow index has remained below the overbought level. The pair may see some significant movements in either direction as the market receives European and US PMI data.


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