Market News & Analysis
Market Brief: FTSE roars higher for second straight session
Fawad Razaqzada December 16, 2019 8:42 PM
- Market update at just after midday in London: In FX, CAD lead commodity dollars higher while JPY and USD were the weakest. Stocks were higher in Europe, led by the FTSE, after a lacklustre session in Asia overnight and a flat close on Wall Street on Friday. Oil was higher, so too were copper and silver prices. Gold was flat as a weaker dollar and ongoing “risk-on” trade provided conflicting forces.
View our guide on how to interpret the FX Dashboard
- Sentiment towards risk assets remained positive after the US and China managed to strike a phase one trade deal and as voters in the UK delivered a surprisingly large support for PM Boris Johnson’s Conservatives - this has likely paved the way for the Brexit Withdrawal Agreement to be finally passed through parliament, ending months of uncertainty.
- Data recap: Today’s economic data releases show a mixed real economy. China’ retail sales (+8% y/y) and industrial production (+6.2% y/y) both topped expectations, while surveyed purchasing managers among manufacturers in UK (47.4), France (50.3), Germany (43.4), and Eurozone (45.9) reported deteriorating economic activity in the sector. However, these were offset by better than expected services PMIs from France (52.4), Germany (52.0) and Eurozone (52.4), although the UK PMI (49.0) was weaker.
- GBP: Despite the soft UK PMI data, the pound refused to give back any meaningful chunk of its election-linked gains. Investors realise the PMI data reflects sentiment before the outcome of the election was announced. UK data may well improve in the months ahead given the clearing of the dark Brexit clouds that had brought a gloomy feeling among businesses and households.
- Stocks: UK markets have jumped higher for the second session. This comes after Boris Johnson’s big election victory alleviating some Brexit-related uncertainty. It looks like we are not the only ones bullish on the FTSE as outlined in the Week Ahead report on Friday. Goldman Sachs said it was particularly bullish on UK homebuilders and banks that have struggled recently. “Clarity on the UK’s terms of exit from the EU should unlock pent-up business investment; the reversal of a decade of fiscal consolidation should provide a fillip to domestic demand; and a pick-up in global growth should underpin a recovery in net exports,” the bank said in a note.
- Coming up:
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.
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.