Market News & Analysis


Top Story

Buying the corona dip ahead of G7 meeting

Investors are buying the dip this morning, picking up assets which plunged in value last week. Later today G7 finance minsters will have a phone call to discuss how to best to respond to the economic effect of the coronavirus and investors are hoping that they will decide on some form of financial stimulus to buffer their economies from a slowdown.

Over the last 24 hours the world-wide increase of new cases has been relatively small with only a few new cases registered in each country other than in South Korea and in China. It is possible that the 851 new cases reported by South Korea are also the result of a very stringent checking policy with company workers and officials having their temperatures measured as they enter official buildings. On the other end of the scale is the US which reported only three new cases overnight, possibly because many are passing undiagnosed.

The FTSE has rallied more than 2% not only on the corona-related recovery which included airlines, tour operators, oil majors and mining firms, but also due to a dip in sterling which helped boost UK-facing stocks such as housebuilders and DIY firms.

Sterling sinks to 1.2772

Britain’s fraught trade talks with the EU do not bode well for a quick resolution of the UK’s trade relations with the bloc and the prospect of the UK remaining in a trade limbo is eroding the pound. Sterling perked up 0.2% this morning, but only after falling to the lowest level in five months. Investors could be looking at a long and painful decline in the pound unless there is some progress in the EU trade talks over the coming month.

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.