Market News & Analysis


Market Brief: China wants US tariffs removed before further farm goods purchases


  • At midday in London, GBP was the strongest and AUD among the weakest. Gold was trading higher, copper and oil lower. Stocks were coming off their best levels after futures rose earlier in the day.
  • GBP was holding steady following recent sharp gains, undermining the FTSE. The EU's chief negotiator Michel Barnier, who had previously said "big gaps" remained between the UK and EU, has now said a Brexit deal could be struck as early as this week. However, he has warned it was "time to turn good intentions into legal text". The UK and EU officials are set to meet at a summit on Thursday and Friday. This meeting could determine whether UK is headed for a no-deal Brexit at the end of this month.
  • European stocks were sharply higher earlier but gave up some of those gains after Bloomberg reported, citing people familiar with the matter, that China will struggle to buy $50 billion of US farm goods annually unless Washington removes retaliatory tariffs so they can afford it. The focus will turn to US Q3 earnings reporting session, which kickstarts this week. Lots of bank earnings will come in over the next few days, including Citigroup, JP Morgan, Goldman Sachs and Wells Fargo today and Bank of American tomorrow. HERE is my colleague Ken Odeluga’s bank earnings preview.
  • Data highlights
    • The German ZEW Survey revealed the “Current Situation” index deteriorated more than expected (to -25.3 vs. -19.9 in September and -23.6 expected), while the “Expectations” index deteriorated less than expected (-22.8 vs -22.5 last and -26.4 expected).
    • Supported by raised Brexit optimism, the GBP barely reacted to news UK wages grew less than forecast at 3.8% 3m/y vs. 4.0% eyed or the fact the unemployment rate ticked higher to 3.9% y/y from 3.8% last. Sterling did ease off the highs but was still retaining most of its gains.
    • Overnight, Chinese CPI inflation came in at +3.0% y/y, above 2.9% expected and 2.8% last. However, PPI measure of inflation declined 1.2% y/y as expected (vs. -0.8% prior). In other news, US President Donald Trump imposed steel tariffs on Turkey Monday night and threatened there could be more to come. This comes after Turkey’s military movement into Syria. The USD/TRY exchange rate was relatively stable at around 5.900

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.