Global stocks rally on positive Apple and GE earnings

Global stocks rose today as investors reacted to the positive corporate earnings from Apple and General Electric. In Europe, the DAX, CAC, and Stoxx 50 rose by 12, 21, and 10 points respectively. In the United States, futures tied to the Nasdaq and S&P500 rose by 30 and 7 points respectively. In Asia-Pacific, the Nikkei and ASX rose by 165 and 40 points respectively. However, stocks in Hong Kong fell by almost 3% as the market opened after a week’s long break. The spreading coronavirus has led to increased tensions in the financial market. Companies with ties to China have moved to reassure investors about their activities. Also, today, British Airways cancelled all flights to mainland China. Other international airlines are also considering the measures.

The Australian dollar pared earlier gains as the market continued to focus on the impact of the coronavirus to the Chinese economy. The disease has so far infected more than 5,974 people and killed more than 130 people. Most of these people are from China. The danger is that the disease will affect entertainment, retail, manufacturing, transport, and other industries. Just yesterday, Apple announced that it had started to restrict travels to Mainland China. Companies like Disney and Imax expect low attendance to their theme parks and theatres. Earlier in the day, Australia released better-than-expected inflation numbers. The headline CPI increased by 1.8% in the fourth quarter after increasing by 1.7% in the third quarter.

The euro declined today following more weak data reports from Germany. Data from Destatis showed that import prices declined from 0.5% in November to 0.2% in December. On an annualized rate, the price declined by -0.7%, which was lower than the consensus estimates of -0.6%. On a positive note, the Gfk consumer climate survey rose from 9.7 to 9.9. Another positive was from Italy, where producer price index improved from -2.6% to -2.1%. Meanwhile, from the United Kingdom, the house price index rose from 1.4% to 1.9%. Later today, the market will receive the first interest rates decision by the Federal Reserve. The bank is expected to leave interest rates unchanged at 1.75%.

EUR/USD

The EUR/USD pair declined to an intraday low of 1.0994. This was the lowest level since November 28 last year. The pair has been declining since reaching a high of 1.1240 on January 2 this year. The price is below the 14-day and 28-day exponential moving averages. The price is along the lower line of the Bollinger Bands. The signal and main line of Stochastic Oscillator are in oversold territory. The pair may remain at the current levels ahead of the FOMC decision later today.

AUD/USD

The AUD/USD pair pared gains made earlier today. The pair is trading at 0.6746, which is slightly below the day’s high of 0.6777. These are significantly lower than the monthly high of 0.7030. The price is below the 9-day and 20-day variable index dynamic average. The money flow index has moved from the lowest level in months to the current level of 30. The pair may remain at the current levels ahead of the Fed’s interest rate decision.

USD/CHF

The USD/CHF pair rose to an intraday high of 0.9750. This was the highest level the pair has been since January 14. The pair has been moving upwards after reaching a low of 0.9612. The price is slightly above the 14-day and 28-day exponential moving averages. The RSI has been moving upwards. As with the AUD/USD, the pair could see some significant moves as the Fed makes its decision.