GLOBAL STOCKS RETREAT AS THE EVERGRANDE CRISIS MOUNTS
The price of crude oil declined slightly even after the United States moved to tighten enforcement of sanctions against Iran. According to the Wall Street Journal, the State Department will send a delegation to the United Arab Emirates (UAE). The goal will be to warn banks and other companies in the country to avoid dealing with Iran. Failure to do this will lead to sanctions, which could negatively impact them. Biden’s policies are relatively different to what he promised during the campaign. At the time, he blamed Trump for leaving the nuclear deal reached during the Obama administration. He then pledged to go back to the deal, but the administration has grown frustrated by Tehran’s nuclear program.
UK stocks retreated slightly as the Omicron risks rose. The index declined by about 0.15% after Boris Johnson unveiled new rules as the country deals with a rising number of cases. Some of the measures that were announced include new vaccine passports, mask mandates, and encouraging people to work from home. The government also announced new measures that will hit restaurants and pubs. The index also rose after strong updates from Rolls-Royce Holdings and Frasers Group. Rolls-Royce expects that it will be cash-flow positive this year. Frasers Group, the parent company of Sports Direct, also published strong results but it warned against lockdowns.
Global stocks retreated as investors took profits and worried about the new Covid-19 variant. In the United States, the Dow Jones and S&P 500 indices also turned lower. Another concern traders are having is Evergrande, the giant Chinese property company. The crisis deepened after the company defaulted on dollar debt for the first time. This triggered a rate cut to “restricted default” by Fitch. This move signals the end for Evergrande, which has about $300 billion in debt. Other real estate firms in China have also struggled. For example, Kaisa defaulted after it missed a $400 million bond payment.
EURGBP
The EURGBP pair tilted higher today. It is trading at 0.8578, which is slightly above the intraday low of 0.8560. On the four-hour chart, the pair is above the 25-day and 50-day exponential moving averages. It is also approaching the important resistance level at 0.8595, which was the highest level on November 5th. The Relative Vigor Index (RVI) has also moved slightly above the neutral level. Therefore, the pair will likely keep rising as bulls target the key resistance at 0.8600.
NZDUSD
The NZDUSD pair was little changed today as investors wait for the upcoming US inflation data. The pair is trading at 0.6800, which is a few points below the intraday high of 0.6820. On the four-hour chart, the pair is at the same level as the 25-day moving average. It is also slightly below the key resistance level at 0.6860, which was the lowest level on September 29th. Therefore, the pair will likely remain in this range ahead of the inflation data.
EURUSD
The EURUSD pair ticked lower as worries over the Omicron variant rose. It is trading at 1.1316, which is slightly below the intraday high of 1.1385. On the four-hour chart, the pair has moved between the middle and upper line of the Bollinger Bands. The Relative Strength Index (RSI) has tilted lower. Still, the pair will likely bounce back and retest the lowest level of 1.1385.
