Market News & Analysis


Market Brief: Risk Assets Rally as Cooler Heads Prevail


View our guide on how to interpret the FX Dashboard.

  • Following peak “WW3” fears in overnight trade, cooler heads prevailed as news spread that there were no US causalities from the Iranian missile strikes and no immediate plans for further strikes. In a speech this morning, President Trump emphasized economic sanctions, rather than further military actions, in response to the attacks.
  • That said, late headlines of explosions in Baghdad’s “Green Zone” may keep traders on edge again heading into Asian session trade.
  • US data: The ADP Employment report (Dec) came in at 202k vs. 160k expected. Combined with upward revisions to previous reports, traders are more optimistic heading into Friday’s NFP report.
  • FX: The New Zealand dollar was the strongest major currency on the day, while the safe haven Japanese yen was the weakest as geopolitical fears receded.
  • Commodities: In a truly massive move, oil prices (WTI, -4%) traded as high as 65.60 before reversing to trade down to a low near $59 intraday, driven by receding fears of military action in the Middle East and a surprising buildup in inventories. The prices of gold (-1%) and bitcoin (-2%) followed similar, if less dramatic, intraday paths.

  • US indices closed higher as prices recovered from their overnight swoon. European indices also closed in the green, led by a 0.7% gain in Germany’s DAX.
  • Technology (XLK) was the strongest major sector on the day. Energy (XLE) was the weakest, and the only sector to fall, dragged down by falling oil prices.
  • Stocks on the move:
    • Boeing (BA) ticked -2% lower after one of its planes experienced a crash near Tehran, killing all 167 passengers and 9 crew members on board.
    • Pharmacy Walgreen’s Boost Alliance (WBA) slid -6% after missing analyst earnings and revenue estimates.
    • Retailer Macy’s (M) tacked on 2% after reporting solid holiday sales.

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.