Market News & Analysis

Top Story

Turnaround Tuesday As Stimulus Comes Into Focus

The markets are stabilising after the biggest rout since the financial crisis on Monday. US futures are on the rise, US bond yields are picking up, Asian markets traded higher overnight, and crude has jumped 7% as it recovers from losses of 30% at its worst in the previous session.

Reasons why the market is rebounding?
In the cold light of day, yesterday’s frenzied selling looks very overdone. Today the market appears to be gaining some perspective following a sell off which saw the FTSE and the S&P briefly move into bear market territory. The million-dollar question is whether this is a dead cat bounce or the start of a more meaningful recovery?

A Temporary Issue
Wuhan, the epicentre to the deadly outbreak is opening its borders once again after a symbolic visit from President Xi. This serves as a reminder to the markets that coronavirus is a temporary issue. Furthermore, China only had 43 new cases yesterday, like the UK. However, this is significantly down from the 3000 new daily cases at the height of the outbreak. So even as Italy goes into full lock down mode, there is light at the end of the tunnel and a V shaped recover can’t be completely written off.

Economic support
An announcement from President Trump that he will ask Congress for economic relief for workers has also helped lift sentiment. A cut from the Fed combined with economic support from Washington is not the same as the Fed standing alone. US futures are on the rise, US treasury yields are rebounding from the record low and the battered US dollar staging a comeback.

Markets are clear that they want to see serious stimulus efforts to stave off the collapse in the financial markets and a global recession.
The UK Budget tomorrow and Thursday’s ECB meeting will be in focus and could help the market decide whether the actions being taken are sufficient to stem the market fallout and recession fears

What Next?
It certainly feels too early to call the bottom of this selloff. However, the market is giving signals that with the right response, a combined effort from central banks and governments this may not necessarily be the start of a bear market run.


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 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.