Market News & Analysis

Market Brief: FX Subdued Ahead of ECB Tomorrow, US Indices Rally Across the Board


  • FX: The aussie was the strongest major currency and the loonie was the weakest as PM Trudeau called for an election on October 21, introducing an element of political uncertainty into the currency. For more on today’s moves and the outlook for major currencies moving forward, today’s articles on GBP/USD and USD/CHF.
  • US data: August PMI came in at +1.8% y/y, above expectations of a +1.7% reading. Continued solid inflation readings have caused traders to cut back the odds of a 50bps “double” rate cut from the Fed next week, though a 25bps cut looks like a done deal at this point.
  • Separately, President Trump met with his advisors to discuss a possible capital gains tax cut.
  • Tomorrow’s ECB decision will be the week’s marquee event – see our full preview here!
  • Commodities: Oil fell around -2.5% on the day while gold edged higher after four straight days of selling.

  • US indices traded higher across the board, with the tech-heavy Nasdaq leading the way.
  • Utilities (XLU) and Materials (XLB) were the strongest major sector on the day, while REITs (XLRE) brought up the rear.
  • Stocks on the move:
    • A couple of retailers rallied on no company-specific news: J.C. Penney Company (JCP) tacked on 25% today, while embattled Overstock.com (OSTK) gained 7%.
    • All was not well for retailers though as GameStop (GME) lost -10% after reporting worse-than-expected earnings.
    • RH (RH) rallied 5% on better-than-expected earnings figures.

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.