Jump to content

Platinum under pressure as workers prepare to strike - EMEA Brief 10 Apr

Sign in to follow this  

  • South Africa’s Platinum Group Metal (PGM) is bracing for industry-wide tough salary negotiations as it urges the government to invest in platinum markets. Chris Griffith, Chief of Anglo American Platinum Ltd, the world No.1 miner, reassured investors that workers are likely to avoid prolonged strikes. Meanwhile, the rand basket price for platinum and its sister metals rose 20% to 25 % this year already. Slowing global growth could pressure the metal, which hit $891 at 6:00am GMT+1 on the IG Web Trading Platform
  • Gold prices edged lower after being up the most in more than one week on Tuesday. The yellow-metal seems to have reinvigorated after the IMF downgraded global economic growth from 3.5% down to 3.3%. Spot contracts hit $1302.57 at 6:00am GMT+1 on the IG Web Trading Platform. 
  • Oil steadied overnight after rising to five-months highs on Tuesday. West Texas Intermediate May futures were trading at $64.21, having advanced 0.27%, as of 7am GMT+1. The recent rally of crude was strengthened by supply concerns in Libya after the attack on Tripoli by the Libyan National Army.
  • The US dollar floated overnight as markets weight US-China trade negotiations and the Brexit uncertainty. The Australian dollar was up overnight supported by rising prices in commodities such as Iron ore, liquified gas and aluminum, which compose a major part of the country’s exports. 
  • The Bitcoin squeeze seems to have arrested since Monday, after the Chinese Government released a plan to ban mining. Even though cryptocurrency trading and ICOs are illegal in China, it has remained the epicenter of global crypto mining with more energy spent to mint Bitcoins than any other country. It is not yet clear which is the time horizon needed to enact the restrictive proposal and how it will impact crypto prices in the short term.

Asian overnight: Equities in Asia dropped on concerns over global growth and an escalation in trade talks. The worst performer was Japan’s Topix Index which dropped 0.8% while the MSCI Asia Pacific Index fell 0.4%. US 10-year Treasury yields floated back below 2.5%.

UK, US and Europe: Threats from the US over a potential $11 billion of tariffs have been responded to in kind after the European Commission noted that they would retaliate in accordance with WTO guidance. Looking ahead, it is a big day for the pound, with UK monthly GDP, manufacturing production, NIESR GDP, and the all-important EU27 meeting over whether to grant an extension to article 50. Central banks are also in focus, with the ECB expected to keep their monetary policy steady and FOMC minutes also released later in the day. 

South Africa: The rand trades at multi-week highs. Tencent Holdings is up 1.2% in Asia, suggestive of a positive start for major holding company Naspers. The BHP Group is down 0.35%, suggestive of a flat to slightly lower start for diversified miners.

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


Econ Cal 10 APr.PNG

Source: Daily FX Economic Calendar

9.30am – UK trade balance, GDP (February): trade deficit to narrow to £1.2 billion, while GDP falls 0.3% MoM from 0.5% growth, and the YoY figure drops to 1.2% from 1.4%. The rolling three-month figure is expected to fall to 0.1% from 0.2%. Markets to watch: GBP crosses

12.45pm – ECB rate decision (1.30pm press conference): no change is expected but the bank may push towards more easing after the announcement of TLTROs at its last meeting. Markets to watch: eurozone indices, EUR crosses

1.30pm – US CPI (March): headline CPI to rise to 1.8% from 1.5% YoY and 0.3% from 0.2% MoM, while core CPI to be 0.2% from 0.1% MoM and hold at 2.1% YoY. Markets to watch: US indices, USD crosses

3.30pm – US EIA crude inventories (w/e t April): stockpiles rose by 7.2 million barrels last week. Markets to watch: Brent, WTI

7pm – FOMC minutes: these minutes will help reveal the thinking behind the cautious tone to the latest meeting of the Federal Reserve. Markets to watch: US indices, USD crosses

Corporate News, Upgrades and Downgrades

  • Tesco reported a 34% rise in operating profit for the full-year, to £2.2 billion, while revenue rose 11.2% to £63.9 billion. 
  • McCarthy & Stone said that first-half pre-tax profit fell 66% to £3.6 million, despite an 18% rise in revenue to £280.5 million. Restructuring costs caused a drop of £14 million, and the dividend was left unchanged at 1.9p per share. 
  • Rolls-Royce said it would start to inspect its Trent 1000 TEN engines after blade deterioration was identified in some of the products. 
  • Dunelm expects to beat forecasts for the full-year after like-for-like sales rose 12.5% in the third quarter. Sales were bolstered by a 32% surge in online like-for-like sales. 

Aena Upgraded to Buy at Kepler Cheuvreux
FLSmidth upgraded to overweight at Morgan Stanle

DNA downgraded to hold at SEB Equities
Valeo downgraded to sell at Citi
Glencore downgraded to sector perform at RBC
Novartis cut to underweight at Morgan Stanle

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

    • Could the price of pork increase by 78% in China by 2020? - EMEA Brief 18 Apr
      The African swine fever disease has reached Southeast Asia and parts of Europe, including the world’s biggest producer of Pork, China. A prediction from the Japanese bank Nomura, is that this could cause prices to rise by 78% in China by 2020, to 33 yuan per kilogram from 18.5 yuan

      Global PMIs come into focus today, with eurozone and US figures released in the wake of a poorer Japanese number this morning. Pinterest has priced its IPO at $19 per share, above the previously indicated range but still lower than in private funding rounds two years ago.
      • 1 reply
    • China’s data inspires relief: APAC brief 18 Apr
      China’s data inspires relief: The Middle Kingdom was at the centre of financial market focus yesterday. Informally dubbed the “monthly economic data-dump”, market participants were granted the opportunity to test the thesis that the global economy’s Q1 malaise is turning around. And though it was only one set of numbers, the answer received from the Chinese data to this quandary was to the affirmative. China’s GDP figures beat economist’s estimates, printing at 6.4 per cent against the 6.3 per cent forecast; and the litany of other data-points, most notably retail sales, industrial production and fixed asset investment, all either exceeded forecasts, or showed signs of improvement.

      The global economy’s resurrection? The Chinese data has added further credence to the notion that China’s economy, and therefore that of the rest of the globe, isn’t about to fall off the cliff. Judging by the improvement in the numbers, policymakers intervention and receptiveness to market and economic trouble, not just in China but globally, is apparently feeding through into economic activity. Although global equities, and especially Chinese equities, resisted reacting to the good news – the lower likelihood of greater monetary stimulus can explain that one – growth exposed assets conveyed the market’s greater optimism and risk appetite, boding well for risk-assets into the longer term.
      • 0 replies
    • Drag to set your stops and limits on charts before you have placed a deal (and view % change in HLOC)
      You can now use a 'drag and drop' functionality to set the stops and limits on your chart before you have placed a trade. This is available for anyone who has 'Position Preview' enabled. If you don't have this turned on, simply right click on your charts and make sure 'Position Preview' is ticked.
      • 0 replies