Written by Kyle Rodda - IG Australia
Brexit break-down: The headlines in financial markets are mostly Brexit related. What was suspected has become so: Prime Minister Theresa May’s deal with the European Union has fallen by the wayside, potentially (if not, likely) rendering it mute. 24 hours is of course a long time in markets, and this time yesterday optimism was blossoming about a potential Brexit deal to end the years of debate and gridlock. The harsh reality has now bitten though, and
The overarching narrative in global markets is transforming from one preoccupied with the trade war, to one focused on Thursday morning’s (AEST) meeting of the US Federal Reserve. As far as developments in the trade war go, in a week bereft other major stories, traders are demonstrating tentative signs of ease on the subject. Markets are strapping themselves in for the long haul, and a begrudging acceptance that this thing will take time to play out is the prevailing mentality. With that in mind
IMF Managing Director Christine Lagarde commented that U.S. stock valuations have been “extremely high”, possibly implying a correction. On a similar line, U.S. Treasury Secretary Steven Mnuchin insisted that the stock sell-off wasn’t “surprising”, while insisting that U.S. fundamentals remain strong. Lagarde also advised to be ready for more market volatility
During IMF U.S.-China trade tension was cited as a major reason for cutting its outlook for global growth.
Intense Brexit t
Dead cat bounce in Asia? The ASX200 really couldn’t catch a bid yesterday. Most concerningly, it happened within a back drop of slightly higher volumes, showing that the sellers truly washed out the bulls throughout the day’s trade. The Asian region kicked-off the week sluggishly in general, unable and unwilling to run with the lead provided by Wall Street on Friday evening. The action in Asia prompted calls of a dead-cat bounce across global equities, something that has since been proven premat
China recorded its slowest growth in a quarter for almost a decade. GDP growth year-on-year came in at 6.5% down from estimates of 6.6%, largely down to the continued trade war with the U.S. and high debt levels.
MSCI Asia Pacific Index recorded its worst three week decline since the start of January 2016 with volatility approaching similar levels seen in 2012, mainly due to China's performance and the recent equities' fallout.
US indices further declined on Thursday as market vola
Written by Kyle Rodda - IG Australia
Inverted Yield Curves: There’ll probably be a lot of talk about “inverted yield curves” and “recessions” today. For some, reading such headlines will come as a shock. Perhaps even a cause of anxiety. It’s wise to understand why such commentary has emerged – and what that may imply. The price action in US Treasuries has been quite dramatic in the past 24-hours: the (what ought to be) familiar themes regarding a looming global economic slow-down, and the p
The risks that markets have been vulnerable to all week have popped-up in the last twenty-four hours, wiping some of the shine off what has been an otherwise strong performance from global equities. The elephants in the room throughout the week’s trade has been the US-China trade-war, along with the simmering structural problems affecting emerging markets – developments in which had been conspicuously absent. Trade tensions were reinflamed during yesterday’s Asian session and then again overnigh
Asian overnight: Market volatility remains evident throughout Asia, with yesterday’s sharp tumble being followed up by a strong rebound overnight. Chief amongst those gainers were the Chinese markets, which gained ground despite the ongoing trade war with the US. Suggestions that China and the US could resume trade talks has helped boost short term market sentiment. Crude prices were also fighting back in the wake of the biggest one-day decline in more than two years yesterday.
UK, US and E
Are We Turning the Corner on Global Trade Wars?
There were a few very prominent, positive developments on the trade war front this past week, but is it enough to systemically change the course of the global economic standoff back towards the cooperative growth of the past? Throughout the past week, there was a building din of unconfirmed reports that US President Donald Trump would delay the decision on whether or not to apply tariffs on auto and auto part imports at the May 18th initial d
Overnight: The benchmark S&P500 reached new record highs overnight, as the record bull run on Wall Street continued. The S&P briefly touched the 2873-mark in the US session, led higher by consumer discretionary stocks, before selling-off in late trade following the news ex-Trump advisor Paul Manafort has been found guilty of financial crimes. The milestone achieved on Wall Street punctuated a respectable day on global equity markets, which were trading-off greater risk appetite until ear
Risk-off (again): Just when it looked like it was safe to jump back into financial markets, it was risk-off again overnight, as market participants dwelled once more on the myriad of risks facing them. There’s nothing entirely new in what has developed during the European and North American session: the same confluence of factors that has weighed on sentiment in markets have simply reared their head again. It’s probably what makes this situation all the graver, if not at the very least, highly g
Global markets: Global equities retreated overnight as investors turned their attention to the several risk factors affecting markets at present. The Dow Jones, S&P500 and NASDAQ are all lower for the day, backing-up the modest losses sustained in European shares. The risk aversion is justifiable and reflects the general confusion of investors in a week bereft of powerful good news stories. The focus instead has been on the several distractions bemusing markets, including the unfolding Presi
Theresa May has scheduled another vote on her Brexit deal following the latest round of voting on the house of commons as MP’s voted last night to extend article 50. It still remains to be seen whether this extension will be agreed to by the EU.
The US senate has voted to prevent funding for Trump’s border wall, the main sticking point of the government shutdown at the beginning of the year, potentially setting up a veto from the president.
The FTSE was up 0.5% yesterday but most o
MSCI All-Country Index, which tracks shares in 47 countries, hit the lowest level since August '16 overnight
Crude hovers above $74 a barrel on concerns Hurricane Michael in the US may affect supply
USD down as it does not keep pace with SGD. Trump comments that FED is moving rates too quickly
Iron Ore Benchmark breaks back into $70s amid speculation over further stimulus from Chinese policymakers
Trump accepted the resignation of Nikki Haley as US ambassador to UN. C
Asian markets move lower on the rather tedious reiteration of trade war fears.
Huge volatility spike sees Turkish Lira dropping 13.5% against the USD.
Oil prices edged up on worries that reimposed U.S. sanctions against Iran would tighten supplies.
UK growth (Q2), trade (June) and production data (June) later today.
Asian overnight: Asian markets followed their US counterparts lower, as trade fears continue to impact market sentiment. Japanese markets where the biggest
Sentiment and Wall Street: Risk appetite appears to be slowly returning to the bellies of investors, with global equity markets experiencing a synchronized push higher to start the week. Wall Street has led the charge of course, overnight adding to the all-time highs achieved at the end of last week. The S&P500 posted a remarkable gain of 0.72 per cent as that index entered rarefied air, while the Dow Jones added 1 per cent to crack the 26,000-mark once more. Trade wars and emerging market t
It was a choppy day in markets as sentiment vacillated in response to the latest escalation in the US-China trade war. US President Trump made traders wait a little longer than was flagged for his administration's trade announcement, leaving it until well after Wall Street's close to drop the news. Upon the eventual release, initial reactions were unfavourable: though the $US200bn worth of tariffs would go ahead on September 24th at the rate of 10 per cent, this will be upped to 25% come the sta
Hedging activities in JPY are building up as the Golden week in Japan approaches. Japanese markets will be shut for 10 days from Friday’s close in occasion of the accession of the new emperor to the throne. The situation could prove risky as this was the sort of environment where we saw flash crashes in the JPY against USD and AUD back in January.
The S&P benchmark was up 0.9% on the day, following strong earnings releases on Tuesday. The performance could be moderate for the rest of
US equity markets traded firmer overnight whilst Asian markets, for the most part, trade lower this morning
Fed rate hike and FOMC meeting later today seems priced in
US tariffs on Chinese goods reiterated by Washington
Bitcoin falls to a 2 and a half month low on regulatory concerns
PwC facing a £10m fine over their poor BHS audit
Tesla cuts 9% of staff with a refocused goal of profitability
UK, US and Europe: A mixed affair in Asia saw gains in Japan o
Theresa May to visit Brussels today to meet with EU leaders. The visit will see May attend ceremonies marking 100 years since the end of the First World War and she will also have a working lunch with French President Emmanuel Macron which is expected to cover the Brexit deal following news of a draft withdrawal agreement this week.
US Fed holds rates as expected with a further hike anticipated in December which saw USD gains and Treasury yields hit highest level since 2008
US Fed watch: The US Fed meeting has been kickstarted and the markets are shuffling around in anticipation. US equities at time of writing are putting in a mixed performance, though al major Wall Street indices remain trading below key technical levels. It comes following a day in which Asian and European markets sold-off in sympathy with Monday night’s rout in North American shares. A desire for safety has supported a bid in US Treasuries: they are higher across the board. Interest rates trader
Geo-political troubles in Turkey push the lira lower, whilst selling in EM currencies spreads to South African rand and Argentine peso.
Asian stocks fall further.
Euro slips as the usual safe haven yen, the Swiss franc, and the dollar bid up.
Cryptocurrencies mixed in the aftermath of the ETF rejection by the SEC.
Asian overnight: Asian markets exhibited a clear risk-off mood, with the fallout from the recent Turkish and Russian led selloff continuing to impact on m
Chinese stock have rallied with the Shanghai Composite Index gaining more than 4% as officials attempt to support the market as GDP figures last week fell short of the 6.6% growth target by 0.1%
The rest of the APAC region followed suit with all major indices apart from Australia's ASX 200 making gains.
Dominic Raab has stated there may be some flexibility on the Irish border issue. The Brexit Secretary made the comment in an interview which may allow negotiations continue for a s
May will start her two-week campaign to sell her historic Brexit deal to MPs as EU leaders have agreed on the UK's Brexit deal during the summit held in Brussels over the weekend, outlining it is "the best and only deal possible".
European Commission President Jean-Claude Juncker explained that anyone who thinks that the EU will offer improved terms if MPs reject the deal will be left "disappointed" - MPs are expected to vote on the 12th of December.
Asian equity markets had a mixe
A Habit of Cutting Down Progress Towards Ending Trade Wars
This past week, optimism was dangled in front of the markets and violently snatched away before it became too established. We have been dealing with the escalation of explicit competition in trade policies for the since March, and each hint of progress in turning the major players back from economic stalemate has been consummately dashed. This past week, there were two fronts on which it seemed we were heading for an important brea
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