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Risk appetite despite trade wars; Dollar motivation; political risks rises - DFX key themes

Trade Wars Update: It No Longer Matters?  Seemingly a routine occurrence for the global financial markets, we saw the state of global trade deteriorate yet again through the past week. As expected, the United States went forward with tariffs on an additional $200 billion in Chinese goods. The terms are for a 10 percent rate on a range of imports that will increase to 25 percent by the end of the year. The standard, immediate response from China was quickly implemented, but only on $60 billi

JohnDFX

JohnDFX

Trump tweets OPEC "Get prices down now!" - EMEA brief 21 Sep

Global equity markets are shining with the Japanese Nikkei hitting an 8-month high, Chinese shares on course to make their biggest weekly gains in 2 years, and a strong earnings outlook expected to continue. US stock market also looks to continue it's march to record highs are strong fund inflows support the market. Figures released on Thursday by EPFR Global quoted a $14.5bn inflow. The Hong Kong dollar (pegged to that of the USD) strengthened early Friday ahead of the US Federal

JamesIG

JamesIG

RIO buyback and industrial metal rally - EMEA brief 20 Sep

Stocks pull back in the Asian overnight market after a tepid close of Wall Street last night. Bellwether metals copper and zinc, along with other industrial metals, continue their rally as investors and traders focus on increasing demand rather than US-Sino relations. Rio Tinto announced a $3.2bn share buyback scheme, and whilst the Anglo-Australian miner saw 3.2% gain the ASX didn’t follow suit and ended down slightly. Potential swings on the UK Rio listing on the open. In

JamesIG

JamesIG

ASX yesterday - APAC brief 20 Sep

ASX yesterday: SPI futures are indicating a 5-point jump at the open for the ASX200, as traders continue to ride the wave of relief washing-over global markets. The boost in global commodity prices has underpinned the bounce in the ASX, with the materials and energy sectors leading the charge higher. Commodities markets maintained their run overnight, collectively climbing 0.76 per cent according to the Bloomberg Commodity Index, while the price of oil also threatened to challenge new highs, hol

JasmineC

JasmineC

Markets defy expectations - EMEA brief 19 Sep

The rebound in Chinese stock markets has extended and US bond yields are steady after the market digested the trade tariff news. MSCI Asia-Pacific index up 0.95%, whilst the Japanese Nikkei rises 1.3% A reclassification of the S&P 500 will see tech behemoth such as Facebook and Alphabet move from 'information tech' stocks into 'communication services' along with about a fifth of the index. Oil prices are seen to consolidate after rally. Cryptocurrency markets are holding

JamesIG

JamesIG

Shifting sentiment - APAC brief 19 Sep

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

JasmineC

JasmineC

Bellwether metals down on $200bn US Sino tariffs - EMEA brief 18 Sep

Trump to impose an additional 10% tariff duty on China rising to 25% next year if no deal is reached. China's yuan down on the back of trade war talks, whilst a stimulus package helps support the equity market. Gold's typical 'safe haven' status isn't re enforced this time around, with flow seen into the USD over the precious metal. Nickel, aluminium and bellwether metal copper hit on the LME by the $200bn tariff. Oil drops on the same news. Mining shares also hit as

JamesIG

JamesIG

Update on trade war - APAC brief 18 Sep

US President Trump’s administration has announced the next round of tariffs on $US200bn worth of Chinese imports. The tariffs will be at a rate of 10 per cent, increasing to 25 per cent by the end of the year. The tariffs will be implemented on the 24th of September. The Chinese have stated that they will not come to the negotiating table if this second round of tariffs were implemented. We will be awaiting their response in the coming days.   The price action quoted below is evolving,

JasmineC

JasmineC

Neverending trade wars - EMEA brief 17 Sep

Whilst the Tokyo markets are on holiday, most other Asian equity markets slip on reports that Washington are continuing their tariff roll outs with a focus once more on Chinese imports. Thin liquidity due to the closed Japanese market didn't help, however moves in currencies seem minor. Dollar steady against a basket of major currencies, whilst gold nudges up. Oil prices have generally eased as the trade war row potentially distorts the demand outlook. The cryptocurrency mar

JamesIG

JamesIG

Market sentiment - APAC brief 17 Sep

The economic calendar is relatively light, and markets await guidance from US President Trump about his intentions regarding the next round of tariffs on China. This will likely be the headline theme this week with sentiment probably swinging on how this narrative unfolds. There isn’t a terrific lead being handed to us from Wall Street, which demonstrated its fundamental resilience at the end of last week’s trading but didn’t truly threaten new all-time highs. An easing of fears around emerging

JasmineC

JasmineC

Another last minute trade war fear, fundamental trading, the dark side of central banking - DFX key themes

Is There an Effort to Keep Markets Uneasy in Trade Wars? How many times does something unusual have to occur before it is considered a planned? I have noted a number of times over the past month that some unexpected policy development was announced hours before the markets closed for the weekend. There is an unspoken commitment by central bankers and global leaders to prevent volatility in their respective financial markets. Volatility is the general definition of risk, and there is a clear

JohnDFX

JohnDFX

Dividend Adjustments 17 Sep - 21 Sep

Expected index adjustments  Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 17 Sep 2018. If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect  your positions, please take a look at the video.  NB: All dividend adjustments are forecasts and therefore speculative. A dividend adjustment is a  cash neutral a

JamesIG

JamesIG

ECB and BOE rate decision - EMEA brief 13 Sep

Treasury Secretary Steven Mnuchin has invited Chinese delegates to a new round of trade talks. The news breaks just days after Trump threatened additional tariffs on Chinese goods. Asian equities edged higher on Thursday in response to news braking of potential US-China trade negotiations, and have partially recovered previous losses.   While the UK and Europe prepare for the final rounds of Brexit negotiations, the government steps up its contingency planning. The prime minister i

SteveIG

SteveIG

Mark Carney to stay on at BoE - EMEA brief 12 Sep

Mark Carney will stay on as the BoE (Bank of England) governor until the end of January 2020 to help the UK through any Brexit turbulence. Unilever laid out plans for it's December listing as a new Dutch entity, initiated originally due to Brexit risks. China is set to request the World Trade Organization (WTO) to hit the US with good duties. Dollar slips. Oil prices have risen following a report that the US crude inventories are set to decline. Whilst top oil produce

JamesIG

JamesIG

Sterling rallies on Brexit talks - EMEA brief 11 Sep

GBP rallies on Brexit talks and a hope for a deal before the year is out. Whilst there seems to be a break in tariff hostilities, it seen by most as only temporary. A softer yen helped support Japan's Nikkei. Asian overnight: Chinese and Hong Kong stocks were the two weak spots in a mixed overnight session, with strong gains for Japanese and Australian markets. The expected imposition of a whole raft of new US tariffs on Chinese goods has brought about further pressure on bus

JamesIG

JamesIG

Apple suppliers hit by Trump Tweets - EMEA brief 10 Sep

Asian stocks have slumped to a 14 month low on the back of China worries. USD edges higher as trade tensions keep markets on edge, whilst oil rises as new production in US drilling stalls. Slightly higher dollar causes gold to fall, along with rate hike views and trade war worries. Asian overnight: Fresh tariff concerns hit Asian markets overnight, with Apple suppliers particularly hard hit thanks to the US president’s tweets regarding the tech giant moving production to the

JamesIG

JamesIG

Risk-off - APAC brief 10 Sep

For whatever good news that could come out this week in global markets, it would take something of extreme magnitude to distract traders from the unfolding emerging market crisis and escalating US-China trade war. The debilitating aspect of both stories is the sense of randomness and chaos surrounding each. Regarding emerging markets, the concern is how challenging it is to judge what exposure developed markets have to the various issues plaguing them; regarding the US-China trade war, the perce

JasmineC

JasmineC

Expected Index Dividend Adjustments 10 Sep - 15 Sep

Expected index adjustments  Please see the expected dividend adjustment figures for a number of our major indices for the week commencing 10 Sep 2018. If you have any queries or questions on this please let us know in the comments section below. For further information regarding dividend adjustments, and how they affect  your positions, please take a look at the video.  NB: All dividend adjustments are forecasts and therefore speculative. A dividend adjustment is a cash neutral ad

JasmineC

JasmineC

ECB and BoE Rate Decisions, New Territory in Trade Wars, Global Political Risks - DFX key themes

Important European Central Bank Rate Decisions As we find distraction in trade wars and political risk, it is important to remember that we are still dealing with more traditional fundamental issues in the background. One of the most systemically important and extremely underpriced risks is the global market’s long-standing dependency on massive stimulus from the world’s largest central banks. That wave of easy money through massive rate cuts and largest stimulus programs has noticeably rec

JohnDFX

JohnDFX

US & China ramp up tensions - EMEA brief 07 Aug

The Asia equity market ex-Japan are looking at their lowest levels since July last year. Tech sector as a whole was hit by a drop in chip stocks yesterday as well as a knock to social media. Investors are cautious that new U.S. tariffs on China could come into play at any time. Yen and Swiss franc are looking to be bid up for those looking at safe harbours. Non-farm payrolls are out later today. Asian overnight: Yet again trade concerns weighed on Asian markets,

JamesIG

JamesIG

Emerging market concerns continue - EMEA brief 06 Sep

The Asian market index futures boards are seeing a sea of red on the back of continued EM anxieties. Dollar seeing pressure as European peers are bid up. Tesla stock slips as investor worries deepen, whilst the Tesla bond hits a record low. Uber on track for an IPO in 2019, however there are no plans to sell it's tech unit according to CEO. Goldman have dropped bitcoin trading plans for now according to reports. Crypto space crashes.  Gold seeing an increase in

JamesIG

JamesIG

EM Crisis - APAC brief 06 Sep

The pain in emerging markets continues to be too difficult to ignore, although it must be said that the effects of the crisis were relatively contained in overnight trade. There is this sneaking suspicion in markets presently, that whatever the worst outcome is for emerging markets, some of that must inevitably spill into the developed world. The issue is however, it remains to be seen how and where these signs of contagion may first show-up. Now of course it may not do so at all, but as the sco

JasmineC

JasmineC

Mercedes gunning for Tesla - EMEA brief 05 Sep

Stocks have fallen whilst the dollar remains effected on trade tensions and tariff wars. The AUD has given up gains on GDP data. Despite being the most shorted stock on Wall Street (even ahead of Tesla), Amazon pipped the $1 trillion valuation briefly yesterday as it surpassed the $2,050.27 a share requirement. Its expected that there will be no change in the FTSE 100 for the first time in 12 years today with no individual constituents being upgraded or downgraded. The Briti

JamesIG

JamesIG

Market stress - APAC brief 05 Sep

Market stress: The world economy and financial markets are displaying further signs of duress as traders enter the mid-part of the week. Trade War fears hang over markets like a darkening cloud, and emerging markets are wobbling and appear on the verge of a greater crisis. Of the two prevailing concerns, the problems within emerging market economies is slowly taking greatest attention. The South African economy looks to be slipping into recession and Argentinian policy makers are scrambling rega

JasmineC

JasmineC

Emerging markets address rising inflation - EMEA brief 04 Sep

Asian stocks were mixed yesterday with no lead from US session and continued concerns over trade tensions. Argentina announces new fiscal policy, while Turkey's central bank hints towards a rate hike. WTI trades higher as two rigs off the Gulf of Mexico are evacuated ahead of hurricane. Brent loses ground as India allows state refiners to import Iranian oil. RBA holds rates steady at 1.5%. Asian overnight: A mixed session overnight has seen substantial gains in

SamuelIG

SamuelIG

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