Market News & Analysis


Market Brief: A trade headline a day keeps the bears away

,

  • At 13:00 BST, the NZD was the strongest and GBP among the weakest, while stocks were sharply higher in Europe, led by the FTSE 100.

  • The Dollar Index edged further higher after posting a bullish pattern the day before as the likes of the EUR, CHF and GBP gave way. But NZD stole the show, posting the day’s biggest rise among the major currencies, in an otherwise subdued FX volatility day. The kiwi was given a shot in the arm by RBNZ Governor who downplayed the likelihood of resorting to non-conventional monetary policies (i.e. QE). Up until today, the NZD had been one of the weakest currencies after the RBNZ recently cut interest rates to a record low in order to support a flagging economy.
  • Stocks have risen sharply today. There’s been very little macro news so far during the European session, so trade-related headlines continued to drive the markets. Reuters reported that China and the US are still discussing details about upcoming trade talks in October, making preparations to ensure "positive progress" is made during the negotiations, according to the Chinese commerce ministry. This comes after Donald Trump tried to divert attention away from the impeachment inquiry to talks on trade by saying that a deal with China “could happen sooner than you think.” The US President also signed a partial trade deal with Japan’s Prime Minister Shinzo Abe on the sidelines of the UN General Assembly in New York.
  • In company news, it's very unusual to see two FTSE 100 shares down by double-digit percentage amounts at same time – especially on a day when the index itself is up a cool 1%. Yet Pearson shares fell 17% by late morning while Imperial was down about 10%, before both pared some of their losses. Tobacco group Imperial Brands was accused of 'not making a lot of sense' by broker RBC after a new sales forecast following a profit warning. And Pearson's troubled US business strikes again, hitting the outlook.

  • Coming up: The final US second quarter GDP estimate (13:30 BST) is expected to be left unrevised at an annualised rate of 2.0% q/q; weekly unemployment claims (13:30 BST) are expected to print 210K and pending home sales (15:00) are seen falling 1% month-over-month. Meanwhile FOMC members Bullard (15:00 BST) and Clarida (16:45) will be speaking later, but first it will be ECB’s outgoing President Mario Draghi who is due to deliver a speech (14:30 BST) in Frankfurt.

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.