Market News & Analysis


Top Story

Iran tensions hit FTSE, ratchet up oil trade

As expected, tensions in the Middle East have ratcheted up over the weekend following the US assassination of a top Iranian general Friday. Iraq has asked the US to withdraw its troops from the country because the assassination happened on Iraqi territory while Iran pulled out of the international nuclear deal, prompting President Trump to respond with threats against both countries. The President’s harsh rhetoric has caused some resistance at home as House Speaker Nancy Pelosi said the House of Representatives would vote this week to curb Trump's military powers.

The FTSE, European stocks and US stock futures are showing a sea of red this morning.  In London stocks with exposure to the Middle East and the high oil price such as Abu Dhabi-based NMC Health, airlines IAG and easyJet ended up the worst hit. The FTSE gainers were also obvious given the high oil price and rising geopolitical tensions: BP, Shell and military equipment maker BAE Systems.

Safe haven asset volumes rise through the roof

The crisis is channeling investors towards safe-haven assets such as the yen and gold, with gold hitting the highest level in seven years and volumes nearly doubling from most trading days in December. 

Brent crude futures continued to nudge at the $70 mark but for the moment that level seems to be holding, at least until the next Middle East news. However, Brent crude trading volumes have risen through the roof since the Middle East tensions escalated last week, with trade on Friday doubling from the previous days and Monday is likely to see a similarly high level of activity. 

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.