Market News & Analysis


Top Story

FTSE Hits 6 Month High On Chinese GDP and Weak Pound


The FTSE surged to a 6-month high boosted by a falling pound post dire retail sales data and amid broad risk on sentiment following Chinese GDP data. NMC topped the index whilst miners also featured heavily on the gainers’ board.

Chinese GDP In Line Lifts Risk Sentiment
Economic growth in China touched a 29-year low at 6.1% in 2019, down from 6.6% in 2018. The fact that GDP was in Line with expectations an offered no nasty surprises, despite the US – China trade dispute running across the year, has left investors relieved. The data comes just two days after the signing of the US – China trade deal which should help to put a floor under risks to the manufacturing sector. There are still signs of distress in other areas of the economy such as the banking sector as financial risks continue to accumulate. 

Pound Slumps Post Retail Sales
Dismal retail sales sent the pound lower across the session. The pound snapped a three-day winning streak which had seen it rally to $1.3118. The data is part of a more sinister picture.  GDP unexpectedly contracted in November, inflation hit a three-year low and UK retail sales recorded a spectacular miss, contracting -0.6% mom rather than a 0.6% gain.  A hattrick of soft data across this week makes an interest rate cut by the Bank of England at the end of the month all the more likely. The pound has weakened reflecting the increased probability of a rate cut. However, sterling remains comfortably above the key psychological level of $1.30.

Rio Tinto Jumps Despite Production Falling
Rio Tinto jumped 3.3% on the back of Chinese GDP reading and following the release of Q4 production results, which focus on shipment and output figures. Iron ore shipment increased 1% QoQ to 86.8 million tonnes. However, production fell to 83.6 million. with declines being attributed to poor weather conditions. Despite the challenges faced in 2019, Rio Tinto remains optimistic on the 2020 outlook. Rio Tinto is up 30% across the year, supported by a 36% increase achieved in iron ore price.


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.