- Stocks: Mild risk-off tone prevailed amid profit-taking after the S&P 500 yesterday hit a new record high before quickly easing back as Donald Trump disappointed prior expectations by providing no fresh news regarding the US-China trade situation. The US President merely suggested that a phase one deal “could” happen soon and that China wanted it so badly. Sentiment is also hurt by falls in Asian markets due to ongoing tensions in Hong Kong where anti-government protesters have changed tactics to disrupt the city’s transportation system on weekdays. At midday in London, European stocks and US index futures were lower.
- FX: Thanks to the pullback in equity markets, safe-haven JPY and CHF were higher, only bettered by RBNZ-driven NZD, while other commodity dollars such as the AUD and CAD brought up the rear. Bitcoin was continuing to coil inside a falling wedge technical pattern.
View our guide on how to interpret the FX Dashboard
- Commodities: Thanks to a weaker stock market and USD/JPY, gold managed to extend its gains from the day before when it bounced nicely off that $1450 key support level as we had highlighted the possibility before. Crude oil prices fell along with other risk-sensitive assets.
- RBNZ surprised the markets last night by deciding against a rate cut and NZD pairs spiked broadly higher after RBNZ held rates and didn’t deliver the dovish press conference that many expected.
- UK CPI missed expectations with a print of 1.5% y/y, versus 1.6% expected and down from 1.7% previously. Core CPI was in line and unchanged at 1.7%y/y. RPI also missed the mark at 2.1%, down from 2.4%. Possibly due to a stronger pound, PPI input slumped 1.3% m/m, pointing to subdued inflationary pressures. GBP/USD struggled to move in one or the other direction in a meaningful way, holding below 1.2850.
- Eurozone Industrial Production rose 0.1% m/m, better than a drop of 0.2% expected.
- US CPI due at 13:30 GMT. Both headline and core CPI measures of inflation are expected to print unchanged readings of 1.7% y/y and 2.4% y/y, respectively. On a month-over-month basis, they are expected to print +0.3 and +0.2 per cent respectively.
- Fed Chair Jay Powell testifies at 16:00 GMT. Investors will be watching for any insights into interest rates outlook and comments on the health of the US economy to gauge the possibility of a further rate cut this year.
Stocks/sectors in focus:
- Spanish Banks are among the biggest fallers on a quadruple whammy of negatives. These are: weaker sector earnings, waning optimism on a trade breakthrough, sliding Eurozone long-dated yields, and Spain's new Socialist/far-left coalition.
- ABN Amro fell almost 7%. A criminal probe into alleged money laundering raises doubts about its cost-cutting targets, whilst trading profits tanked.
- UK oil mid-cap Tullow collapsed 25% after cutting output guidance.
- Commercial property developer British Land traded 4.4% lower as it expects business to remain "uneven".
- Homebuilder Taylor Wimpey fell 2.3% after an in-line update with no guidance upgrades.
- Pub operator JD Wetherspoon rose 2.2% on relief from positive comparable sales which rose 5.3%.
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.