Jump to content

Fed Rate Reveal Promotes Stock Rally - EMEA Brief 29 Nov

Sign in to follow this  

  • Fed hints that future interest rate rises may be lower than anticipated. Whilst Wall Street saw it's 5th biggest daily increase Asian stocks also gained as a result, the Nikkei saw a 0.9% increase whilst SoftBank rose over 3% and Nintendo a further 4%.
  • Trump announced yesterday that he is exploring new auto tariffs with a view to promote domestic production. This comes as part of an ongoing Trump Administration tariff war. 
  • Georgia elects first female president. Salome Zurabishvili won the vote with a 59% majority
  • Mitsubishi Heavy Industries Limited was ordered to pay up to 150 million won to 28 South Koreans who were used as forced labour by the company in World War Two. 
  • Bitcoin gains heading for biggest increase since April. Providing some relief after the 32% loss this month
  • Intu takeover worth £2.8 Billion scraped. The shopping network cuts dividends in attempt to maintain construction investment. 

Asian overnight: Equities surged after Jerome Powell made a speech widely viewed as dovish. The S&P 500 posted its best day since March, with tech and consumer discretionary shares leading the way. Asian markets also bounced as investors pinned their hopes on a slowdown in the pace of Fed tightening after one more hike in December.

UK, US and Europe: Today’s FOMC minutes are something of an afterthought following the Powell speech, but we do have plenty of German and eurozone data, and investors should also watch out for US existing home sales, after new home sales fell to their lowest level since March 2016. Also watch UK banks, after the release of the BoE’s forecasts on a ‘no deal’ Brexit scenario.

Russia-Ukraine frictions result in Ukraine calling on Nato to send ships to the Sea of Azov. This follows Russia opening fire on three Ukrainian ships on Sunday. Nato are yet to respond to this plea, however Chief Jens Stoltenberg on Monday called for Russia to free the Ukrainian ships and captive sailors. 

Economic calendar - key events and forecast (times in GMT)


8.55am – German unemployment (November): unemployment rate to hold at 5.1%. Markets to watch: EUR crosses

10am – eurozone business confidence (November): forecast to rise to 1.14 from 1.01. Markets to watch: EUR crosses

1pm – German inflation (November, preliminary): prices to rise 2.4% YoY from 2.5%. Markets to watch: EUR crosses

1.30pm – US personal income & spending (October): income to rise 0.4% MoM and spending to rise 0.4% MoM. Markets to watch: USD crosses

3pm – US pending home sales (October): sales to fall 0.5%. YoY. Markets to watch: USD crosses

7pm – FOMC minutes: no change was made in policy, but the minutes will be key for USD movement this week. Markets to watch: USD crosses

11.30pm – Japan unemployment rate (October): rate to rise to 2.4% from 2.3%. Markets to watch: JPY crosses

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  • Unilever 10 year CEO Paul Polman to be succeeded by Alan Jope after retirement
  • Phoenix Group reported cash generation of £1.3 billion for 2018, exceeding its target of £1 - £1.2 billion. 
  • Rio Tinto will develop a ‘technologically advanced’ mine in Western Australia, with construction to start next year and production expected in late 2021. 
  • Revolut given permission to expand the fintech firm into Japan and Singapore

Adecco upgraded to buy at Goldman
Total upgraded to neutral at JPMorgan
Cobham upgraded to buy at Berenberg
Iliad upgraded to equal-weight at Morgan Stanley

BASF downgraded to equal-weight at Barclays
Equinor downgraded to underweight at JPMorgan
ISS downgraded to sell at Goldman
Senior downgraded to neutral at JPMorgan

IGTV featured video

Information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Sign in to follow this  


Recommended Comments

There are no comments to display.

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

You are posting as a guest. If you have an account, please sign in.
Add a comment...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Blog Statistics

    • Total Blogs
    • Total Entries
  • Latest Forum Topics

  • Our picks

    • Something Interesting
      "USDCNH is flying up to key resistance could mean Govt interventions coming or are they going to let it go through 70000?"
      • 4 replies
    • Customise Stochastic and KDJ indicators on charts
      On the back of recent client feedback you can now customise the Stochastic and KDJ indicator levels on IG charts.
      • 0 replies
    • Stock markets continue to recover: APAC brief 17 May
      Stock markets continue to recover: Global stocks have maintained their bounce. It’s looking more like a market that is searching for it’s next high now, as price action, from a technical perspective, suggests the recent wave-lower is over. Hence, from here, considering trade-war risks, and therefore anxiety in the market, remains high, the matter becomes whether stock indices are preparing to pop in a new higher-high, or whether what we will see is a new lower-high. The result of that simple binary will inform market participants what the broader trend is in the market: are we still trending higher, or are we seeing the start of a trend reversal?

      The litmus test to come: This commentary pertains primarily to the S&P500, which has been the bellwether for global equities, recently. But it could equally be said of the ASX200, too, which demonstrated its resilience yesterday. Just sticking to the S&P500, the price set-up offers some potentially interesting insights about the world, in the weeks to come. Another high for US stocks is another record high and a clear continuation of that market’s bull run – defying, really, what is a deteriorating global backdrop. If this fails to occur, then talk will certainly emerge whether stocks are beginning a prolonged period of weakness, in line with clearly softer fundamentals.
      • 0 replies