The Return of Geopolitical Risk (the US and Iran Again)
For almost the entirety of this past year, the dominant force of motivation among investors fit within a rotation of just three major themes: trade wars, growth concerns and monetary policy. Even when these matters weren’t under full steam, their influence and too many instances of sudden changes in the fundamental weather meant that they lack of bearing led to a similar absence of conviction in speculative performance – momentum if no
Theresa May is coming under increasing pressure from MPs to stop the gridlock on Brexit negotiations.
The pound is expected to see further volatility until at least mid-January as the unknown future of Brexit continues.
The Dollar continued to trade at a 19-month high on Monday as concerns over slowing economic growth have reduced the appetite for riskier stocks and currencies and have backed the greenback as a safe-haven.
The price of bitcoin has fallen below the cost to mi
The pound ticked higher after dropping on Tuesday after Theresa May’s amended Brexit deal rejection. Today’s vote in the UK parliament whether to leave the EU without a deal is unlikely to provide excessive pressure on the sterling in case the proposal is rejected, however downside risk exists. Cable was almost flat as of 7:30am GMT trading at 1.31069.
The US dollar floated and yields fell on Tuesday after softer inflation data increased the possibility of more dovish policies from the Fe
Another record-reaching session: US stocks have notched-up another record high, as the S&P500 closes in on the 3000-mark. The ASX200 yesterday came close to its own psychological milestone, nearing the 6700-level. The highs came on a light-day’s trade on Wall Street, however, with US markets trading-in a shorted session in ahead of the Independence Day holiday. Currency markets were more volatile, with commodity currencies climbing courtesy of several positive trade balance data out of New Z
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
Trump’s G20 Summit: Love him or loathe him, Donald Trump seems to be able to get things done. Given he is the most powerful man in the word – at the very least, in a political sense – perhaps this isn’t such a difficult task. When you have the world’s largest economy, coupled with the world’s most potent military at your disposal, one would have all the leverage needed to get their way. But nevertheless, arguably not since Ronald Reagan has global politics experienced such a rapid ideological sh
Written by Kyle Rodda - IG Australia
The global market landscape: November’s gains, as modest as they were, have been snatched it would seem, across Wall Street indices and Australia’s ASX200. The bloodletting has been profuse once more this week, and it seems that diminishing number of momentum chasers have had handed to them another dose of market reality. To be fair, this latest round of selling has been precipitated by a new risk: tumbling oil prices. The price of the black stuff bounce
A bearish day: It was a hectic day on the dealing floor, yesterday. Several surprises smacked markets during early Asian trade, and the subsequent 24-hours has since belonged to the bears. The “slower global growth” narrative is gaining momentum, driving traders from riskier assets into safe-havens, as fear snowballs. The VIX is well off its highs from last week, but it did lift overnight, nevertheless, with price action indicating the markets are bracing for further pain. Overall, it was mostly
A week that’s (so far) under-delivered: Anything can happen in the space of 24-hours in financial markets. But as we enter the final day of trade in global markets for the week, activity today is shaping up as being just as tepid as that which we’ve experienced in the week’s first four days. It was hoped some new, market-moving information may have been delivered in what was a back-loaded week. Afterall, there was no shortage of event risk. However, thus far, despite a litany of risk events, man
Risk-assets up, but trade was tepid: The overnight session was, on balance, positive for risk assets, though the conviction behind market-moves was missing. The S&P500 – the natural barometer for market-mood currently – experienced a middling day. It’s closed more-or-less flat, having made a failed foray higher throughout Wall Street trade, to have sold off right-below crucial resistance at 2800. For the bulls in the market, circumstances didn’t fundamentally change last night. The short-ter
Trump is subject of large-scale investigation by the House Judiciary Committee who have sent requests for documents to 81 individuals. The investigation will look into alleged obstruction of Justice, corruption and potential abuses of power.
Despite positive outlook of US and China trade war, as parties appear closer to reaching formal agreement, U.S stocks saw a downturn after positive opening. The S&P fell 0.4% to 2,792.62, The Dow tumbled 206.67 points to 25,819.65 and the Nasdaq
Wall Street ended in the negative on Monday as investors digested mixed results from the latest batch of bank earnings. Goldman Sachs reported better than expected earnings, however its shares fell 3.8% due to first quarter numbers showing net profits fell by 21% YoY. Citigroup earnings also beat expectations, although saw a 2% fall in overall revenue.
The S&P 500 slipped 0.1% to 2,905.58 after having three consecutive weeks of gains. The Dow Jones ended the day down 27 points at 26,
Lyft, the most recent high profile IPO, shares have seen huge trading activity over the first two days of trading as over 41.5 million shares were traded, well over the 32.5 million offered in the IPO. However, the ride-hailing company saw it's shares slump 12% on its second day of trading down to $69.01, below the official IPO price of $72. The downturn comes after the stock rallied to a high of $88.60 on Friday.
US equities surged on Monday due to strong manufacturing data as factory ac
What Was and Was Not Announced in the US-China Phase 1 Trade Deal
Release the doves. The US and China announced last week that they finally were able to come to terms on the their long contentious Phase 1 trade deal. It seems to have conveniently slipped the market’s collective mind that the first stage of the promised reversal to the trade war was announced back on October 11. No tangible change had been put into place between then and now, but that didn’t slow the climb from risk benchma
Other central bankers throw their weight around: After the US Fed exited the ring yesterday, some of the world’s other heavyweight central-bankers weighed-in on the global race-to-the-bottom for global interest rates. The BOJ met yesterday, and though they kept their policy entirely untouched, it Governor Haruhiko Kuroda affirmed his commitment to monetary stimulus if necessary. RBA Governor Philip Lowe also delivered a speech, in which he was explicit in his belief that lower interest rates wer
The control of the market: The bulls and bears are circling one another, with neither to take control in a meaningful way this week. There is a vacillating in sentiment, maybe as each side recognizes that not enough information has emerged this week to tip favour towards one camp or another. Moments like these can be opportunities whereby markets build to a breaking point. It becomes a matter now of waiting for the necessary evidence to buy-in or sell-out. Headlines are determining intra-day mov
Fed sparks bullish sentiment: Traders were bullish overnight, but as far global equities go, the ultimate results were mixed. Activity has been very high, that’s irrefutable. Volumes flowing into stocks have been much higher than average, no matter where you look. Fundamentally, the Fed has lit a fire under markets, and traders are repositioning to adjust to a new set of circumstances. The fundamentals have shifted in quite a meaningful way. It’s the notion that the Fed will maintain monetary po
Sentiment: Global risk appetite diminished once again overnight, sparking sell-offs across equity markets. The concerns about the fragile state of the Turkish financial system and what that might mean for markets was behind the fall, as traders sought out safe havens to park their money. The US Dollar held its advance consequently, but it was the JPY that saw the most activity, with the USD/JPY falling as low as 110.43. Following Tuesday’s relief rally, it would appear investors aren’t quite pre
Mixed trade across the globe: Global equity indices have traded mixed in the last 24 hours. Asian trade was soft, European trade was poor, while US indices look as though they will deliver another day in the green. This may not be such a bad thing: perhaps the differing performance across regional indices is a sign of a more discerning market place. Panic about the global economic landscape has subsided for now, allowing traders to take a more nuanced view of the asset class. There is a degree o
Trade negotiations: Global markets ended last week on the back foot, after trade talks between the US and Canada stripped traders of some hope that the global trade-war may be de-escalating. It was figured that following the relatively positive developments in US-Mexico trade negotiations early last week that perhaps a change of tact was emerging from US President Trump’s administration regarding global trade. Hopes were quashed upon news that negotiations between the US and Canada had broken do
Chinese factory activity reduces for the third month in a row with Caixin/Markit Manufacturing PMI at 49.9 for February. A reading above 50 shows expansion
Rolls-Royce announces a pre-tax loss of £2.9billion for 2018, after a profit of £3.89billion in the previous year
Minister George Eustice quits the government in relation to Theresa May’s promise allowing MPs to vote on delaying Brexit, if the deal is rejected
Asia stocks slightly higher with the Hang Seng higher by 0.45
The United States and China Jostling for Economic Supremacy
The world’s largest economies are starting to update on the status of their health. And, though it may not seem to be the case in these speculatively charged markets, financial performance relies heavily on a healthy global expansion. This past Friday, China reported its third quarter GDP reading. The 6.5 percent clip would be an enviable pace for most of the developed world, but for this debt laden country, this is slowing to a pa
Lyft, the ride-hailing company and one of Uber's main competitors, has begun its investor roadshow to pitch its Nasdaq listing as it looks to raise $2bn at a valuation of around $23bn. The company suggested a price range between $62 and $68 per share in its filing to the SEC on Monday, and will use the ticker symbol LYFT when it begins trading. This is a first indication of what ride sharing companies could be worth in public markets as we await Uber's IPO in the coming months.
Calmer trade, vigilance remains: The sense of cautious optimism in markets remains. Extreme swings in sentiment have been absent. Calm prevails, albeit within a mindset of greater vigilance. There hasn’t been a face ripping rally, nor a vertigo inducing fall, in global equities this week. The trading activity does feel distinct from that which was experienced in December. Fear and subsequent volatility is unwinding. The VIX continues to edge lower, though at a slower pace now. Several of the pan
Last week: At the end of a week that may have been best described as nervous and jittery, markets closed trade in a relatively subdued fashion. The news that the United States and China may re-enter trade negotiations provided the basis for the stability, but the reactions to that news were hardly ecstatic. This is justifiably so, considering investors have become very accustomed to overreacting to news that turns-out to be little more than fluff. The crisis in Turkey has temporarily settled, th
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