US open: Stocks rise after jobless claims rise

US jobless claims unexpectedly rise cooling bets that the Fed could move sooner to taper bond purchases. News that the US government could avoid a shut down is also boosting the mood.

USA (2)

US futures

Dow futures +0.24% at 34460

S&P futures +0.35% at 4370

Nasdaq futures +0.3% at 14798

In Europe

FTSE +0.03% at 7108

Dax -0.44% at 15291

Euro Stoxx -0.37% at 4066


Jobless claims unexpectedly rise

US stocks are heading for a stronger start as investors digest a mixed bag of data and await news from Washington over government funding.

On the data front, US GDP the final reading for Q2 was upwardly revised to 6.7% QoQ, up from 6.6% revealing that the economic rebound in the April – June period was stronger than expected.

However, US jobless claims unexpectedly rose again last week. 362K Americans filed for unemployment benefit, this was up from 351k the previous week and marked the third straight week of gains. The data comes following surprisingly weak US NFP last month. The Fed have said that they are watching the labour market recovery closely for clues for when to move on reining in support.

The weaker jobless claims appear to be unnerving the market pointing to potential weakness in the labour market recovery. It would take another weaker NFP for the Fed to consider delaying tapering bond purchases and after a few weeks of rising jobless claims, this could be a possibility.

Separately the Senate Majority leader Chuck Schumer said that lawmakers had reached an agreement to avoid a government shutdown, extending spending until December 3rd.

Fed Chair Powell is due to speak later.

Where next for the Dow Jones?

The Dow Jones is extending is recovery from 33613 low on September 20. It trades above its ascending trendline and is retaking the 50 sma on the daily chart. The receding bearish bias on the MACD is keeping buyers optimistic of further upside. Any move higher would need to retake the 200 sma at 34980 and 35000 the weekly high in order to cement a bullish trend. On the downside a move below 34250 could see the sellers gain traction towards 33612.

Dow chart

FX – USD extends gains, German CPI keeps rising

The US Dollar is trading around its highest level in as year, underpinned by elevated US treasury yields and expectations that the Federal Reserve will start tapering bond purchases by the end of the year.

EURUSD trades at yearly lows on the back of stronger USD. German CPI rose by less than expected at 4.1%, but still up from 3.9% in August. The fact that inflation continue to rise will raise questions over how transitory it really, prompting a more hawkish response from the ECB.

GBP/USD  +0.24% at 1.3485

EUR/USD -0.12% at 1.1583


Oil eases as stock piles rise

Oil prices are heading lower pulled lower by rising US crude inventories and a strong US Dollar. EIA data revealed that stockpiles increased by 4.6 million barrels in the week ending September 24th, this is the first rise in stock piles for almost two months.

Separately the US Dollar trades at an almost one year high which makes buying oil more expensive for holders of other currencies.

Losses have been capped by a more bullish outlook. Citigroup is forecasting a 1.5 million barrel per day deficit on average over the next 6 months, even with supply increases.

WTI crude trades -1.2% at $73.90

Brent trades -1.17% at $77.20

Learn more about trading oil here.


Looking ahead

15:00 Fed Chair Powell testifies




How to trade with

Follow these easy steps to start trading with today:

  1. Open a account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.




Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account