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  1. Asia share markets began the week with strong gains as investors hope for both further progress at US-China trade talks in Washington this week and more stimulus from major central banks. Trump stated in a White House news conference that he would be "honored" to remove current tariffs if an agreement can be reached, and to possibly extend the March 1st deadline for a deal. The Shanghai Composite was up around 1.8% by the end of the morning trading session, whilst the Hang Seng and the Nikkei gained 1.51% and 1.8%, respectively. Australia's ASX 200 traded 0.35% higher. US stock markets surged on Friday, posting another solid weekly gain. The Dow Jones jumped over 400 points, the S&P gained 1.1% to close at 2,775.60 and the Nasdaq gained 0.6% to end of the day. US markets are closed today for Presidents Day. In Forex, the Pound was up 0.2% against the USD at $1.291 after reports that Australia's trade minister was ready to sign a fast-tracked trade agreement with the UK in the event of a no-deal Brexit. Oil prices reached their highest levels for the year so far on the back of OPEC supply cuts and US sanctions on Iran and Veneuela. US crude was up 1% at $56.143 and Brent was up 0.8% at $66.78 a barrel. Gold gained 0.2% to $1,323.56 per ounce, helped by a slight fall in the dollar. Asian overnight: An overwhelmingly bullish session overnight has seen Asian stocks surge higher, following on from a Friday’s session which saw the Dow post its biggest weekly gain in a month. Sentiment around US-China trade talks appear to be improving, and while we saw no concrete breakthrough from last week’s talks, they will continue to negotiate this week. For today, the US markets are closed for Presidents' Day. We also saw sharp gains for oil amid expectations of further cuts from key suppliers. Finally, the pound enjoyed a boost after the Australian trade minister said that they would fast-track a trade deal with the UK in the event of a no-deal Brexit. UK, US and Europe: Looking ahead, there are precious few events of note to watch out for. Meanwhile, with the US markets closed for the day, volumes will be low. South Africa: Markets look set for a positive start following gains in Asia, catalysed by the progression in trade talks between China and the US. The US dollar has weakened on the back of improved risk appetite and in turn we are seeing commodity prices trading firmly in to positive territory. Emerging market currencies (such as the rand) are renewing some short term strength. Tencent Holdings is up 2.2% in Asia, suggestive of a similar start for major holding company Naspers. The BHP Group is up 1.45% in Australia, suggestive of a positive start for local resource counters. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar Presidents’ Day in the US – US stock markets closed Corporate News, Upgrades and Downgrades UK cyber-security chiefs have concluded that any risk posed by Huawei in UK 5G telecoms projects can be managed, denting the US drive for a global ban. Barclays has been dumped by one of its biggest investors, as US hedge fund Tiger Global has been reported to having sold off its stake in the bank. Reckitt Benckiser reported a 10% drop in revenue to £12.6 billion for the year, but adjusted operating profit rose 8% to £3.36 billion. The firm expects 3-4% like-for-like growth in 2019. Anglo American boosted its dividend payout ratio by 40% for the year, while earnings rose 21% to R14.5 billion for the year. Petra Diamonds suffered a loss of $57.9 million for 2018, from $117.7 million a year earlier, while revenue rose to $207.1 million, from $191.8 million. Atrium Ljungberg raised to buy at Kepler Cheuvreux Continental upgraded to hold at Berenberg Swedish Match upgraded to buy at SocGen ThyssenKrupp upgraded to buy at Bankhaus Centrica downgraded to hold at Berenberg Nordex cut to neutral at MainFirst Petrofac downgraded to hold at HSBC Renault downgraded to reduce at AlphaValue 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.
  2. Alphabet, Google's parent company, saw its share prices fall over 3% in extended trading on the back of continuing pressure on advertising prices and decreasing margins - adding to the concern over the company's periodic surges in spending. This comes despite the company beat expectations across the board in its Q4 results. Theresa May will travel to Ireland today to try to ease concerns over a hard border situation in Ireland upon Brexit. Meanwhile, UK Steel has warned that a no-deal Brexit would severely impact the British steel industry, worth £2.8bn a year in sales. The US Fed's Chairman, Jerome Powell, has signaled that the rate hikes and balance sheet tightening may be coming to a halt amid a concerning outlook for the US economy due to global growth and trade wars. The S&P 500 ended 0.7% higher to claim its fourth successive daily gain. Australian equities jumped 2% as a government-appointed inquiry scoured the country's financial sector for misconduct, leaving the banks to rise. Japan's Nikkei ended the day down 0.2%. Markets across most of Asia were offline for Lunar New Year. The AUD strengthened after the Australian central bank halted interest rate changes, noting uncertainty over falling house prices. The currency ended 0.5% higher at $0.7263. The pound and the euro both remained steady at $1.3040 and $1.1431, respectively. Brent Crude rose 0.4% to $62.75 a barrel, whilst Gold was up 0.2% to $1,314 an ounce. Asian overnight: A thin Asian session saw Australian stocks rise sharply amid a gains for the financial sector and the miners. Chinese and Hong Kong markets remained closed for Lunar New Year, with Japanese stocks trading somewhat mixed over the session. The Australian dollar gained ground following a decision from the RBA to retain rates at 1.5%, while their trade balance rose to the second largest surplus on record. However, much of this was thanks to a huge fall in imports; the largest one-month fall in imports recorded. UK, US and Europe: Looking ahead, the UK services PMI looks set to be the big release to watch out for, following on from worrying manufacturing and construction sector surveys. With the UK economic growth picture hugely reliant upon the services sector, today’s figure will have significant implications for Q1 growth. That services theme continues into the afternoon, with the US non-manufacturing PMI reading expected to tick lower. On the corporate front, watch out for numbers from Walt Disney and Snap. South Africa: Global markets are trading flat to mixed this morning with Hong Kong and China closed for the Lunar New Year festivities. Oil has started to rise again with an embargo on Venezuela's largest oil producer and OPEC production cuts providing some of the short term excuses for the move. The rand remains firm against the dollar, while metal prices are mostly firmer this morning. The BHP Group is up 1.1% in Australia, suggestive of a positive start for local miners. Anglo American Platinum has released a strong trading update which is expected to further bouy platinum miners this morning, following on from yesterday's upbeat report from Impala Platinum . Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 9.30am – UK services PMI (January): previous reading 51.2. Market to watch: GBP crosses 3pm – US ISM non-mfg PMI (January): forecast to fall to 57.5 from 58. Markets to watch: US indices, USD crosses Corporate News, Upgrades and Downgrades Tesla has agreed to buy Maxwell Technologies in a $218m deal, in an attempt to lower the cost of car batteries. Ocado reported a loss of £44.9 million for the year, from a £9.8 million loss a year earlier. Sales were up 12% to £1.48 billion, and the firm expects the retail sales business to report growth of 10-15% in 2019. BP said that replacement cost profit rose to $12.7 billion for 2018, compared to $6.2 billion a year earlier. Upstream production rose 8.2% over the year, and the dividend was raised by 2.5% to 10 cents per share. Centrica has signed a long-term supply deal for liquefied natural gas with a planned project in Mozambique, as it looks for new sources of fuel as North Sea output declines. St Modwen Properties reported a 4.3% rise in net asset value per share, to 470.4p, for the year through to December. The dividend was raised 13.1% to 7.1p per share. Cobham upgraded to hold at Kepler Cheuvreux Wirecard upgraded to buy at LBBW Morrison upgraded to buy at Berenberg Orpea raised to buy at Kepler Cheuvreux Carlsberg downgraded to neutral at Oddo BHF Lundin Petroleum downgraded to hold at HSBC Merlin downgraded to hold at SocGen Segro downgraded to hold at SocGe 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.
  3. The 35 day partial US government shutdown has ended after Trump conceded his demand for $5.7 billion to build his border wall as a condition for reopening the government. The temporary measure will fund the government for three weeks while Congress try to craft an immigration deal that pleases the president. US equities closed at a high on Friday as a solution for the partial government shutdown is reached. The Dow closed 0.8% higher at 24,737.20, whilst the S&P 500 also gained 1% and the Nasdaq edged higher on the back of strong earnings from Starbucks. In Asia, China's CSI 300 and Hong Kong's Hang Seng lost almost 0.2%, whilst Japan's Nikkei closed 0.6% lower, led by a fall in utilities stocks. Australian markets were shut for their 'Australia Day' holiday. The pound hovered around a three-month high of $1.3218 on Friday as optimism arises that the UK can avoid a no-deal Brexit. The dollar slipped 0.2% against the yen at 109.31. Oil prices have fallen as Australia became the latest country to back the Venezuelan opposition leader Juan Guaidó as the major oil-producing country's interim president. Brent crude was down 1% at $61.02 a barrel, WTI fell 1.1% to $53.09. Gold reached a 7-month high of $1,304.40 in the early trading session. Asian overnight: A largely negative session in Asia saw losses across Japanese, Chinese, and Hong Kong markets. With oil prices one of the biggest movers, Australian markets would have likely joined those losses had they not been closed for Australia Day. Turmoil in Venezuela had largely written off any hopes of a resurgence for the nation, yet with the military chief defecting and urging his fellow soldiers to do the same, the potential for a huge shift is evident. Given Venezuela has the largest oil reserves in the world, the impact on global supply is obvious should the country shift direction. UK, US and Europe: Looking ahead, a number of US releases appear to have been delayed despite the resolution found for the funding of government entities. Thus, instead markets will be watching for the appearances from Draghi and Carney in the afternoon. South Africa: Global markets are trading mostly softer this morning with US Index Futures down around 0.3% and the Shanghai Composite down around 0.2%. Today's losses partially temper strong gains in equity markets on Friday, following news that the Peoples Bank of China (PBOC) had freed up nearly $40bn for bank lending.The dollar softened on Friday, which combined with trade optimism, has seen metal prices mostly higher, with Gold now back above the $1300/oz mark. The rand is trading flat to marginally weaker this morning, although remains around its best levels seen in the last few weeks. Tencent is 0.4% lower in Asia suggestive of a slightly softer start for major holding company Naspers. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 3pm – US new home sales (December): sales to rise 0.7% MoM. Markets to watch: US indices, USD crosses Corporate News, Upgrades and Downgrades Wood Group has sold three non-core assets for $28 million, and has finalised the previously-announced sale of a wind farm. TI Fluid Systems expects annual operating margins to be in-line for the ear, with overall results meeting forecasts. The CFO will also stand down once a replacement has been found. Paragon Banking said it boosted lending volumes by 41% in its first quarter, with total lending volumes rising to £660.5 million. Saudi Aramco plans to invest almost $1.6 billion for a 19.9% stake in South Korean refiner Hyundai Oilbank. Coca-Cola HBC upgraded to buy at Goldman Dixons Carphone raised to overweight at Morgan Stanley Next upgraded to equal-weight at Morgan Stanley National Express upgraded to buy at Liberum ABB downgraded to sell at Berenberg Micro Focus cut to neutral at Goldman Panalpina downgraded to hold at Baader Helvea Tod’s downgraded to underperform at Jefferies 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.
  4. The IMF has cut its forecasts for growth as it says the global economic expansion is losing its momentum, projecting a 3.5% growth rate worldwide for 2019, 0.2 percentage points less than its forecasts in October. This comes just hours after China announced its slowest economic growth in almost three decades. Meanwhile, over at the World Economic Forum in Davos, there are ongoing talks over an array of current or potential crises, from the US-China trade war to the uncertainty surrounding Brexit. US markets were closed on Monday for the Martin Luther King holiday. In Asia, the Hang Seng was down more than 1%, with the CSI 300 down 0.9% and Japan's Nikkei slid 0.7%. Australia's ASX 200 was also down 0.5%, as the share price of BHP Billiton faltered 1.2% after the world's largest miner reported iron ore production fell in the fourth quarter of 2018. In FX, the pound was 0.1% weaker at $1.2872 after Theresa May laid out her plan B and refused to rule out a no-deal Brexit. Demand for the safe-haven yen maintains its stead as the Japanese currency stands at $109.41. Worries over global growth pulls oil prices lower as Brent was down 0.8% to $62.24 and US Crude was down 0.7% at $53.43 a barrel. Asian overnight: Asian markets have traded in the red overnight as fears over the global growth picture continue to dent investor confidence. Yesterday’s Chinese GDP figure for Q4 came in at 6.4%; the lowest since 2009. Meanwhile, the IMF revised down their global growth forecast thanks to fears over both the Chinese slowdown and Brexit. Hopes of improved relations between the US and China were dealt a blow, with the US planning to proceed with the extradition proceed to take Huawei executive Meng Wanzou from Canada to the US. Data-wise, Japanese inflation once again floundered, with the BoJ core CPI falling from 0.5% to 0.4%. A busy day ahead sees the UK remain in the spotlight, with the latest jobs report accompanied by the public sector net borrowing figure. UK, US and Europe: A busy day ahead sees the UK remain in the spotlight, with the latest jobs report accompanied by the public sector net borrowing figure. Eurozone interests will be particularly concerned with the latest ZEW economic sentiment, where the German figure is expected to fall once more. The US markets are back after yesterday’s MLK national holiday, yet with just existing home sales to watch out for, the calendar looks thin from that side of the Atlantic. South Africa: Global equity markets are trading lower this morning after the International Monetary Fund (IMF) lowered is forecast for global economic growth. US Index Futures trade around 1% lower this morning and the Shanghai Composite Index roughly 1.3% lower. Precious metals are trading lower this morning while base metal prices are mixed in trade today. Oil has temporarily halted its short term gains with Brent trading marginally softer in early trade. The rand has subsequently weakened along with its emerging market currency peers. Tencent HOldings is down 2.4% in Aisa, suggestive of a similar start for Naspers. BHP is down 1.3% in Australia following the release of its H1 operating update. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 9.30am – UK employment data: December claimant count to rise by 10,000, from 21,900 a month earlier, while the November unemployment rate to hold at 4.1%, and average earnings for November to rise by 3% (inc bonus) from 3.3% a month earlier. Market to watch: GBP crosses 10am – German ZEW index (January): economic sentiment index to fall to -21 from -17.5. Market to watch: EUR crosses 3pm – US existing home sales (December): expected to fall 0.8% MoM from a 1.9% gain in November. Market to watch: USD crosses 11.50pm – Japan trade balance (December): forecast to see the deficit narrow to Y600 billion from Y737 billion. Market to watch: JPY crosses Corporate News, Upgrades and Downgrades Google has been fined €50m by France, under the EU's new data and privacy laws. Dixons Carphone saw a 1% rise in group like-for-like revenue for the ten weeks to 5 January, but left guidance for overall pre-tax profit unchanged at £300 million. easyJet said it had a good quarter with revenue in line with forecasts. Total revenue rose 13.7% to £1.29 billion, while passenger numbers were up 15.1% to 21.6 million. However, the airline announced a £15m loss from the drone activity at Gatwick Airport over the Christmas holiday period. Sirius Minerals has agreed to revive the terms of a $3 billion funding round for its Yorkshire potash project. Progress has been made on securing commitments from lenders but the plan has been altered to modify credit risk. Ricardo expects to report a small rise in first-half revenue, which remains broadly in line with forecasts. Order intake was ‘good’ at just over £200 million. Air France-KLM raised to overweight at Morgan Stanley Babcock upgraded to add at Peel Hunt Lufthansa upgraded to overweight at Morgan Stanley Aggreko downgraded to reduce at Peel Hunt BASF downgraded to neutral at MainFirst Shell cut to underweight at Morgan Stanley IAG downgraded to underweight at Morgan Stanley 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.
  5. Asian stocks fell as China's export data indicated a shock contraction, declining by 7.6% since July 2016. This points to deepening cracks in the world's second largest economy and increased fears of a significant slowdown in global growth and businesses. The CSI 300 was down 0.8%, falling from a 3 week high reached on Friday. The Hang Seng slipped 1.4% as both the financial and technology sectors took a hit. US equities ended Friday with marginal losses, however the S&P 500 maintained a weekly gain of 2.5%. The US Dollar Index was 0.1% lower after reaching a 3 month low last week, whilst the safe-haven Yen was 0.4% stronger at 108.09 to the dollar. The Australian dollar, sometimes viewed as a proxy for China's economic outlook, was down 0.4%. Oil prices also took a hit following disappointing China trade figures - one of the largest global importers of oil. Both Brent Crude and WTI was down 1.1%, at $59.83 and $51.03 a barrel respectively. Gold edged 0.3% higher to reach $1,290. With tomorrow’s UK parliamentary Brexit vote looming large, there is also likely to be some positioning ahead of that momentous occasion. Asian overnight: A bearish overnight session saw losses across China, Hong Kong and Australia, while the Japanese markets were closed to observe a bank holiday. Today is all about the Chinese trade data, with both imports and exports deteriorating sharply in December. However, with imports falling -7.6%, while exports hit -4.4%, the overall balance actually shifted further into surplus despite the disappointing figures. Interestingly, despite the imposition of tariffs on Chinese goods, the Chinese surplus has grown significantly, hitting the highest level since records began in 2006. UK, US and Europe: Theresa May is set to warn Eurosceptic MPs today that Brexit could be blocked by parliament if they fail to give their backing in tomorrow's historic "meaningful vote" on the withdrawal agreement. The agreement is strongly opposed by certain Conservative MPs due to the plan for a backstop to avoid a hard Irish border that involves the UK being in a customs union with the EU. Looking ahead, keep an eye out for eurozone industrial production in the morning, with precious few notable releases other than that. With tomorrow’s UK parliamentary Brexit vote looming large, there is also likely to be some positioning ahead of that momentous occasion. South Africa: Global markets are trading mostly weaker this morning with US Index futures down 0.81% and the Shanghai Composite down 0.78% today so far. Markets are trading cautiously ahead of US bank earnings releases this week as well as the all important parlimentary Brexit vote on Wednesday. Gold is trading 0.4% higher this morning while brent crude is 1.1% lower today. The rand has managed to maintain some short term strength having stabilised below the R14/$ mark. Tencent Holdings is down 2.9% in Asia, suggestive of a similar star for major holding company Naspers. BHP Billiton is down 0.25% in Australia, suggestive of a flat to softer start for local diversified resource counters. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 1.30pm – US trade balance (November): deficit to narrow to $54 billion. Market to watch: USD crosses 3pm – US new home sales (November): forecast to rise 2.9% MoM from an 8.9% fall a month earlier. Markets to watch: US indices, USD crosses Corporate News, Upgrades and Downgrades PageGroup expects annual performance to be in line with forecasts, as gross profit for the final three months of the year rose 15.4%, allowing gross profit for the full-year to rise 15.9% to £815 million. Restore said that it forecasts annual results to be in line with expectations, as strong trading in the records management division offsets weakness in the shredding unit. JD Sports expects profits to be at the upper end of forecasts, as weak growth in the UK is offset by a better performance by its international division. Like-for-like sales rose 5% for the cumulative 48 week period to 5 January. Michelmersh Brick said that it expects annual underlying revenue and profit to meet market expectations. Year-end debt will also be below forecasts due to strong cash generation. Brooks Macdonald upgraded to buy at Shore Capital Safilo upgraded to neutral at Mediobanca SpA Engie upgraded to buy at Berenberg Mowi upgraded to buy at Fearnley 3i Infra downgraded to hold at Jefferies Countryside cut to underweight at JPMorgan Heineken cut to underweight at Morgan Stanley Next downgraded to underperform at Credit Suisse 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.
  6. US Index Futures fell and Asian shares toppled on Thursday after a revenue warning from Apple on its Q1 results adds to fears of slowing global growth. Dow futures point to a decline of over 400 points at the open. The Dow is currently trading at 23015, the S&P at 2476 and the Nasdaq at 6211. MSCI's Index of Asia-Pacific shares excluding Japan dropped 0.6%, whilst the Nikkei futures fell 2.2%. The news from Apple sparked a 'flash crash' in the currency markets, sending the safer assets such as the Japanese Yen soaring against most other currencies, rising by as much as 3.7% to 104.87 against the USD. In contrast, the AUD toppled 3.5% to 0.6741 against the USD, its lowest level in a decade. US crude rose 2.5% to settle at $46.54 yesterday, on the back of a fall in Saudi oil exports. Gold remains a safe haven for investors as it continues its rise amid a volatile global market, currently trading at $1290.01 an ounce. UK, US and Europe: Apple has shocked investors with a rare revenue warning on its Q1 results, wiping 8 percent from its share price in after-market trading. The news has stoked investor fears over the outlook for the global economy as trade tensions and weak company earnings hit the equities market hard in the latter half of 2018. The warning sparked a flash sell-off among most major currencies such as the US and the Australian dollar, resulting in a rise in the Japanese Yen as the currency is seen as a safe haven in times of uncertainty. Apple attributes the warning to disappointing iPhone and Apple Watch sales in China, blaming trade tensions and the country's recent economic weakness for the declining demand. Looking ahead, we have the ADP Employment Change figure release at 1:15pm GMT and is expected to be a similar figure with last month, with the release of US Non-farm Payrolls tomorrow. The US manufacturing PMI is also set to come at 3pm GMT, forecast to be lower than the previous figure, indicating a possible industry contraction. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar Corporate News, Upgrades and Downgrades Tesla misses Wall Street estimates, delivering 90,700 vehicles in its fourth quarter last year. The car-maker is also cutting prices on all its models by $2000 to help offset a reduction in federal tax credits for electric car drivers. Apple shares drop 8% after its warning on Q1 results as the sales for its flagship product, the iPhone, disappoint. Next's in-store sales fell 7% in its last quarter of 2018, however online sales were up by 14.9%. Blake Nordstrom, co-president of the American chain of luxury department stores, Nordstrom, has died at the age of 58 after battle with cancer. 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.
  7. The FOMC will begin its 2 day meeting today, with the markets expecting a 25 basis points interest rate increase upon its announcement on Wednesday, which would make this its fourth hike this year. Homebuilder sentiment in the US declined in December to its lowest point in over 3 years, and could be an early indication of an economic softening. Theresa May has announced that the "meaningful vote" for her Brexit Withdrawal Agreement is due to be held in the third week of January, after it was postponed last week amid fears of a defeat. US stocks closed at the lowest level in over 14 months yesterday, with the S&P dropping 2% to 2545.94 and the Dow diving 500 points to 23592.98. This comes as investors fear for the health of the global economy ahead of the Federal Reserve’s final policy meeting of the year. Asia-Pacific stocks also went into retreat on Tuesday as the Hang Seng was down 0.9% in afternoon trading, whilst the CSI 300 and the Topix shed 1.2% and 1.7%, respectively. The Dollar lost 0.2% against the Japanese Yen, falling to 112.53 yen. The Euro was mostly steady at $1.1342, maintaining the 0.4% gain it made on Monday. Oil prices extended losses on the back of signs of oversupply in the United States: US Crude drops 2.6% to a 14-month low, settling at $49.88. Bitcoin has recovered from its sharp fall at the beginning of the month, rising more than 10% yesterday as the digital currency benefited from a strong support near the $3,000 level. Asian overnight: A sea of red has been evident in overnight markets, as sentiment continues to sour ahead of tomorrow's FOMC meeting. Particularly notable losses in Japan came amid a strengthening yen in play through the beginning of the week. In China, a speech from President Xi Jinping offered up little in the way of new policies, instead spending much of the speech extolling the virtues of the communist party. Meanwhile, the RBA minutes signalled that the next rate move is likely to be up rather than down, although this was largely priced in given the subsequent fall in AUDUSD. UK, US and Europe: Looking ahead, the bearish sentiment evident in Europe could easily continue today given the overnight losses, while the major release of the session comes from the German Ifo business climate figure. In the afternoon keep an eye out for the latest building permits and housing starts figures. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 9am – German IFO (December): business climate index to rise to 102.7 from 102. Markets to watch: EUR crosses 1.30pm – US housing starts & building permits (November): watch for a rebound from last month’s decline in activity, as the US housing market continues to worry investors. Markets to watch: US indices, USD crosses Corporate News, Upgrades and Downgrades ASOS shares plummeted over 40% yesterday on the back of a profit warning, adding to fears of a struggling retail sector and triggering a sell-off in fashion retail stocks across Europe. Huawei says it has secured over 25 commercial contracts for its 5G technology. Petrofac said it was trading in line with forecasts, with $5 billion of orders won in the year so far. Wood Group has won a $66 million contract to supply control technologies to Sellafield nuclear plant. Malaysia have filed criminal charges against Goldman Sachs and 2 bankers over they're alleged role in the 1MDB scandal. Cineworld upgraded to top pick at RBC JCDecaux raised to equal-weight at Morgan Stanley Zalando upgraded to buy at DZ Bank Remy Cointreau raised to market perform at Bernstein Asos downgraded to hold at Santander Coface downgraded to hold at Kepler Cheuvreux Nemetschek downgraded to reduce at Kepler Cheuvreux Pfeiffer Vacuum downgraded to hold at HSBC 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.
  8. Theresa May will begin the five days of her House of Commons debate today, culminating in a historic vote on her Brexit compromise deal on December 11. The Dow Jones closed 1.13% higher at 25,826.43 yesterday, whilst both the S&P and Nasdaq posted gains of 1.09% and 1.51 percent, respectively. Asian shares fell on Tuesday as the optimism gathered from the US-China trade truce ends over doubts of a final resolution: the Hang Seng lost 0.3% as the ASX gave up 0.8% and Japan's Nikkei dropped 1.3% lower. USD was 0.3% weaker against the yen, at 113.28. Oil prices continued to rise on the back of the US-China trade truce and ahead of a key OPEC meeting this week in Vienna. US crude gained 1.2%, reaching $53.58 a barrel, whilst Brent crude is currently trading at $62.44 a barrel. Gold rose as a result of a weaker dollar, up 0.4% to $1,235.88 an ounce. UK, US and Europe: Five days of parliamentary debate are to begin today in the House of Commons, as Theresa May will try to secure backing on her compromise Brexit withdrawal deal, all culminating in a historic vote next Tuesday, on the 11th December. Currently, few MPs at Westminster are confident that the prime minister will win the vote, and many believe that May will suffer a defeat. A defeat next Tuesday could lead to a vote of no confidence and a parliamentary gridlock, likely resulting in further talks with Brussels to seek changes to the deal, or, in a more extreme case, a second referendum leading to a possible no-deal Brexit. In the rest of Europe, EU finance ministers have struck a reform deal after all-night talks in Brussels. The deal includes measures to bolster the Eurozone against future financial crises by equipping the banking union with more financial backing, and to give its sovereign bailout fund extra flexibility in its ability to help out countries. Looking ahead, volatility around GBP crosses at 9:15am GMT is likely to increase as the BOE's Mark Carney is due to speak at Parliament, along with three BOE Deputy Governors, about the Brexit Withdrawal Agreement before the Treasury Select Committee. We also have the UK Construction PMI release, which is an indicator of economic health and is expected to be lower than the previous month, signalling a slowdown in industry expansion. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar Corporate News, Upgrades and Downgrades Altria, the maker of Malboro cigarettes, confirms they are in talks over a potential investment in Canadian cannabis producer, Cronos Group. Zopa, the 13 year old P2P lender has become the first of its kind to secure a full UK banking license. Unilever to acquire GSK's consumer nutrition business in a €3.3 billion deal. Glencore's billionaire chief of copper, Telis Mistakidis, to step down amid US corruption probes of the commodity giant's Africa operations. 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.
  9. The G20 summit in Argentina begins today, where discussions around trade, Brexit, and tensions between Russia and Ukraine are expected to be the dominant topics to take centre-stage. FOMC minutes released yesterday pointed towards another rate hike in December, with concerns that trade tensions and corporate debt could impact growth. China’s official PMI fell to 50.0 in November from 50.2 last month, adding pressure on the country to implement more economic support measures amid the trade war. The Dow Jones fell 0.11% on Thursday, whilst the S&P 500 and the Nasdaq Composite dropped 0.22% and 0.25%, respectively. MSCI's index of Asia-Pacific shares outside Japan was last up 0.1%, making a 2.7% gain for the week and reflecting a rebound from the recent sell-off. The Nikkei was up 0.4%. USD fell 0.07% against the yen to 113.39. Pakistani Rupee plunges 6% in a suspected devaluation of the currency by its central bank, amidst ongoing bailout talks with the IMF. US Crude rises 2.3%, settling at $51.45 yesterday as Russia is expected to accept OPEC’s decision in the need to cut oil production. Oil producers are expected to meet in Vienna next week to discuss supply cuts. Gold is currently trading at $1,224.34 an ounce. UK, US and Europe: The G20 summit begins today in Buenos Aires, Argentina. The outcome of which has become increasingly more significant due to recent weeks for a few reasons. Firstly, Donald Trump and Xi Jinping are expected to discuss trade this weekend, a meeting that will be watched very closely for clues on the path of the ongoing tensions between the US and China, after repetitive duty and tariff increases have amounted to a total of $360 billion across both sides. The escalation between the world's two largest economies has been a major threat to the global economy, the upcoming meeting will attribute to whether the world calms its nerves or continues on edge. Then there is Brexit, where Theresa May has the chance to secure international backing for as she attempts to sell her Brexit deal to world leaders at G20. Finally, amid heightening tensions and the flare-up of exchanges between Russia and Ukraine, Trump has cancelled a planned meeting with Putin, blaming specifically on Russia's failure to return ships and sailors seized from Ukraine last week in the Black Sea. Oil prices have rebounded to par some of the steep losses in recent weeks, as confidence returned in the commodity on the back of expectations that Russia will co-operate with OPEC next week in Vienna, where the oil cartel and non-OPEC countries are to formulate an agreement on a supply cut that will stabilise crude prices. After hitting a four-year high at the beginning of October, the commodity has tumbled around 30% as sanctions against Iran's supply has proved to be less impactful than expected and concerns over a slowing global economy has curbed demand. Watch the IGTV featured video below, where industry advisor Malcolm Graham-Wood and Spencer Welch, director of oil markets at IHS Markit, discuss the future of the oil market. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar Corporate News, Upgrades and Downgrades Volkswagen and Tesco to build UK's largest free car-charging network, funding as many as 2,500 electric car charging bays. Unilever has announced that Alan Jope will take over the helm from former CEO Paul Polman. Deutsche Bank's offices in Frankfurt were raided by police yesterday over alleged claims of money laundering. Shares fell 3% on the back of the news. Nio, one of the main Chinese electric car-makers and rival to Tesla, has announced that its U.S. head will step down. Audi has unveiled a concept electric sedan car that is expected to challenge the Tesla Model S and to be in full production by late 2020. Autonomy's co-founder and CEO, Mike Lynch, has been charged with defrauding shareholders in the sale of the company for $11bn to HP back in 2011. 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.
  10. FAANG stocks have now shed more than $1 trillion in market value since recent highs, whilst Target leads the fall in retail as its shares dropped 10.5% yesterday after posting worse than expected earnings figures. The Nasdaq ended the day down 1.7%, whilst the S&P was down 1.8%. The Dow Jones dropped 550 points to close on Tuesday, erasing this year’s gains as it moved into negative territory. Asian stocks slipped on Wednesday as intensifying fears on global economic growth and trade tensions grip the markets. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.45%. The ASX lost 0.5%, South Korea's KOSPI fell 0.4% and Japan's Nikkei retreated 0.35%. Oil has bounced back around $1 a barrel to regain some of yesterday’s 6% plunge, backed by a report of an unexpected decline in US crude inventories. US crude currently trading at $54.31, Brent crude at $63.54. Gold is steady at around $1223 an ounce. Bitcoin fell as much as 16% yesterday, to its lowest level since September 2017. Pressure builds on regulators to increase oversight on cryptocurrencies. Short term, unexpected weakness in the technology sector could have a significant impact on the global economy, adding to an already volatile macro environment. Asian overnight: Another bearish session in Asia has seen declines throughout Japan, and Australia, with Chinese and Hong Kong markets ending up flat on the day. However, those losses could have been much worse, with much of the indices declining heavily in early trade, only to erase much of those losses throughout the latter part of the session. Meanwhile, crude prices took another dive overnight, after Donald Trump came out in support of Saudi Arabia in a written statement. It is clear he values the economic benefit of their relationship over the killing of Jamal Khashoggi, and thus the Saudi leadership could be more willing to listen to Trump over his desire to drag oil prices lower. UK, US and Europe: The sharp sell-off of US technology stocks widened into a global market retreat on Tuesday, underpinned by fears surrounding continued trade tensions, slowing economic growth and weak corporate earnings in the US. Investors worry over sales of Apple’s flagship product, the iPhone, will slow down in light of recent reports that demand for the tech giant’s products in China has declined. This comes in addition as Goldman Sachs slashed its price target on Apple on Tuesday. Short term, unexpected weakness in the technology sector could have a significant impact on the global economy, adding to an already volatile macro environment. In Europe, we are once again on the lookout for the magic 48th letter to spark a vote of no confidence against Theresa May, while the PM herself goes to Brussels to speak with Jean-Claude Juncker as both sides attempt to finalise a Brexit deal in time for Sunday’s summit of European leaders. Stumbling blocks still remain in the withdrawal agreement, over UK’s access to the EU single market and the issue of maintaining a soft border in Ireland. Looking ahead, public sector net borrowing from the UK forms the other notable event of the European session. In the afternoon, watch out for core durable goods, unemployment claims, and crude inventories from the US. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 1.30pm – US durable goods orders (October): orders to fall 1.8% MoM, and excluding transport to rise 0.2% MoM. Markets to watch: US indices, USD crosses 3pm – Univ of Michigan confidence survey (November): index to fall to 98.3 from 98.6. Markets to watch: US indices, USD crosses 3.30pm – US EIA crude inventories (w/e 16 November): stockpiles to rise by 1.7 million barrels. Markets to watch: Brent, WTI Corporate News, Upgrades and Downgrades Renault appoints COO, Thierry Bollore, as interim CEO while allegations against CEO Carlos Ghosn are investigated. Engineering firm, Babcock International’s gross profit has fallen 64% to £65.1m in the half year September. Chinese electronics giant Xiaomi is set to boost its operations in India from 500 to 5000 stores by the end of 2019. United Utilities said that first-half pre-tax profit rose 7.7% to £212.5 million, while revenue was 4.6% higher at £916.4 million. Sage reported a 16% rise in full-year pre-tax profit, to £398 million, and revenue rose 7.6% to £1.85 billion. Kingfisher saw like-for-like sales fall 1.3% in Q3, as weakness in France hit performance. The firm also unveiled a £50 million share buyback programme. Ahold Delhaize raised to buy at Kepler Cheuvreux British Land upgraded to buy at HSBC CYBG upgraded to buy at Shore Capital NegAustrian Post downgraded to sell at Berenberg Indivior downgraded to sector perform at RBCatives 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.
  11. Global stocks rebound after worst month since 2012. Corporate earnings in the US and Europe have helped ease lingering worries over rising interest rates, trade tensions and a slowing global economy. The S&P 500 rose 1.1% and the Nasdaq Composite gained 2%. The Dow is currently trading flat after jumping more than 350 points at yesterday’s open. Asia-Pacific Indices mostly started November on a stronger footing. The Hang Seng was 1.8% higher and Taiwan’s Taiex gained 0.4%, however, Topix was down 0.5% whilst the ASX was roughly flat. The pound sterling rose by almost 0.7% following a report that Theresa May had negotiated an agreement for British financial services companies to maintain continued access to European markets after Brexit. Dominic Raab also predicts a Brexit deal to be made by November 21st. A series of UK economic releases are due today, including: the Manufacturing PMI, a summary of Monetary Policy, and the all important BOE Inflation Report, providing a projection of inflation and economic growth over the next 2 years. The AUD rose 0.95% against the USD after a better than expected trade surplus in September as exports rose and imports fell. AUD/USD currently at 0.714. Turkish Lira drops as the country’s finance minister announced tax cuts that led to doubts over the government’s pledge to take a more disciplined fiscal approach. Brent crude continues its decline, down 0.44% and currently trading at $74.74 a barrel, . Gold is up 0.71% at around $1224 an ounce. Asian overnight: Chinese stocks rose on Thursday on the back of a signalling of a new round of economic stimulus measures by Chinese Communist leaders, in hopes to shore up confidence as the country faces slower growth and the US-China trade war. This comes as an official gauge of Chinese factory output (PMI) weakened to its lowest level in more than two years in October, indicating pressure on the economy. BOE inflation report is set to provide an insight into the bank’s view of economic conditions and inflation... Japanese markets provided the one outlier to an overwhelmingly positive session in China, Hong Kong and Australia. Tax cuts and other stimulus from the Chinese helped boost confidence, while the bullish theme from US and European markets also helped. Rumours of a deal between the UK and EU that would see services firms throughout the UK retain access to European markets has helped provide a boost for the pound. Meanwhile, data-wise we have seen a massive jump in the Australian trade balance, which posted the largest surplus in 18-months. A sharp rise in commodity prices also helped boost Australian stocks and the Australian dollar. UK, US and Europe: There are a few key UK monetary and economic releases to watch out for today. The BOE inflation report is set to provide an insight into the bank’s view of economic conditions and inflation, an outlook for the country’s economic growth which will shape future monetary policy. Mark Carney is due to speak at a press conference at 1:30pm GMT regarding the report – expect volatility around this time. The BOE interest rate will also be released, with a forecast of 0.75%, unchanged from last month’s figure. In the afternoon, keep an eye out for the manufacturing PMI readings from both the US and Canada. On the corporate front, keep an eye out for earnings from Apple as the tech sector comes into focus once again. Economic calendar - key events and forecast (times in BST) Source: Daily FX Economic Calendar 9.30am – UK mfg PMI (October): activity expected to increase in the sector, with the inde rising to 54.6 from 53.8. Markets to watch: GBP crosses 12pm – BoE meeting & inflation report: no change on policy expected, but the inflation report may provide some clues and thus result in some GBP volatility. Markets to watch: GBP crosses 2pm – US ISM mfg PMI (October): index to fall to 59.6 from 59.8. Markets to watch: US indices, USD crosses Corporate News, Upgrades and Downgrades Just Eat has issued a profit warning, saying that earnings will be towards the bottom end of the £165 - £185 million range, due to investments in Latin America, although revenues will be towards the top end of the £740 – 770 million range. Carpetright reported ‘negative’ like-for-like sales for the half year to 31 October, hit by store closures and disruption arising from restructuring. Credit Suisse’s net income for Q3 comes in at 424 million CHF, vs. 449 million expected. Royal Dutch Shell reported an almost 40% rise in Q3 profits, making four-year highs but still short of forecasts. Japanese electronics giant Panasonic saw its share prices drop more than 8% after a report of a 4% fall in half yearly profit. HSBC upgraded to hold at DZ Bank Paradox Interactive raised to buy at SEB Equities Sanofi upgraded to equal-weight at Barclays Securitas upgraded to add at AlphaValue BNP Paribas cut to hold at Independent Research; GBL downgraded to hold at SocGen IMA downgraded to hold at Kepler Cheuvreux Outokumpu downgraded to neutral at Citi 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.
  12. Asian stock market retreats as China rally fades a day after Chinese stocks posted their biggest one-day advance in over 2 years. The Hang Seng is down 3.3% whilst the CSI 300 is currently down 3.5%. The Dow Jones and the S&P closed lower on Monday, currently both down around 1% amidst worries over corporate earnings reports due in the coming week and rising geopolitical tensions. The Saudi All-Share Index is down 4.4% this month, almost its worse month since October last year, all amidst a dumping of Saudi stocks from foreign investors which coincide with the Khashoggi scandal. A key figure of Euro-Zone Consumer Confidence is set to release today at 3pm BST and should reflect the consumer sentiment across Europe. The figure is forecast at -3.2, indicating low levels of confidence and suggests decreased spending. Bank of England’s Mark Carney is schedule to speak at a press conference today at 4:20pm BST. The Sterling is likely to show increased volatility during the speech. GBP falls below $1.30 on the back of reports that Northern Ireland’s DUP are seeking to undermine May’s leadership by backing a plan to narrow her negotiating options. Brent Crude currently sits at $79 a barrel, down 0.5% Gold is continuing its steady gain, up 0.34%, as it retains its status as a safe haven asset in times of uncertainty. Asian overnight: Monday’s bounce is a distant memory as equities turn south once again. Losses were seen across the region as a weaker session in the US knocked back sentiment. Weaker opens are expected across the board in Europe, and a retest of the lows for the S&P 500 now look very likely, even as other indices push to new lows for the month. Chinese officials gave a strong warning to Trump’s administration, stating that they’re not afraid of a trade war with the United States. UK, US and Europe: Another quiet economic day sees only Eurozone consumer confidence as a key event for traders, but earnings season in the US rolls on, with Caterpillar, AMD and McDonald’s on the list. In a meeting with US business leaders, Chinese officials gave a strong warning to Trump’s administration, stating that they’re not afraid of a trade war with the United States. This comes just after a month after the US imposed $200 billion worth of tariffs on Chinese imports on top of a $50 billion levy earlier this year. The ongoing struggle between the two superpowers may not see an end just yet, and China are looking to take a more tempered approach. In Europe, Italy’s big spending plans could be derailed as Brussels are set to reject the populist government’s 2019 draft budget. The European Commission has already indicated that the draft is in serious breach of EU spending rules as Italy’s plan to cut taxes and roll back on pension reforms is expected to raise the budget deficit to 2.4% - a steep climb over the original 0.8% promised by the previous government. The country’s bond yields continue to rise further as uncertainties loom and contagion risk is feared in the financial markets – ratings agency Moody’s has already downgraded Italian debt to one notch above “junk” status. South Africa: Libya and Nigeria are heading into high-stakes elections that could cause a period of instability and disrupt oil supplies. Coming changes in leadership could settle conflicts which have wreaked havoc on both countries’ oil output in recent years, this could play a big role in determining the price of oil, currently trading near four-year highs. Economic calendar - key events and forecast (times in BST) Source: Daily FX Economic Calendar 3pm – Eurozone consumer confidence (October, flash): expected to rise to -2.6 from -2.9. Market to watch: EUR crosses Corporate News, Upgrades and Downgrades Whitbread reported a 0.2% rise in first-half profit, to £257 million, while revenue was up 2.6% to £1.08 billion. It saw some weakness in consumer demand, but it remained on track for the full year. St James’s Place said that funds under management rose 11% for the first nine months of the year, to £100.6 billion. Net inflows rose 15% to £7.68 billion. Travis Perkins saw a 3.9% rise in Q3 revenue, while like-for-like sales were up 4.1%. Ryanair predicts a slow winter after summer profits fell 7%. Renault saw revenue drop by 6% in the third quarter, hit by a fall in emerging markets. Netflix announces plans to issue $2bn in junk bonds to help finance its heavy spending on original productions. Ascential upgraded to buy at Peel Hunt Dialog Semi upgraded to buy at AlphaValue Hermes International upgraded to hold at Berenberg Drax upgraded to add at AlphaValue BASF downgraded to sell at Baader Helvea HSBC downgraded to neutral at Citi Pernod Ricard cut to hold at Kepler Cheuvreux Radisson Hospitality cut to hold at DNB Markets 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.
  13. Recent global sell-offs and the ongoing US-China trade war have caused copper prices to decline to their weakest levels since July 2017. The price of the metal currently sits at around $6300 a tonne after recovering from its slump below $6000 in August this year. The relationship between prices of base metals and future growth has proved to be evident in the past, so much so that this specific commodity is often referred to as ‘Dr Copper’. [Copper] has served as a key economic barometer and as such, a weak price over the past few months is discerning for the outlook of global economic health. Copper is prominently used across electrical applications, communications equipment, construction, transportation, and industrial machinery. Its wide use means that shifts in the demand and supply of the metal across industries has served as a key economic barometer and as such, a weak price over the past few months is discerning for the outlook of global economic health. Emerging economies dominate the world’s largest copper producers, therefore any key events affecting EM countries are likely to influence copper prices. Another factor is the dollar. The Turkish Lira and emerging markets sell-off in August propelled the USD to 12-month highs, making the commodity more expensive for consumers outside of the US. Additionally, Trump’s tariff impositions on Chinese imports has fuelled risk aversion across the stock market. Commodities in particular have taken a hit as traders and speculators grow increasingly concerned about the global economic impact of the deepening trade war. China is still heavily reliant on its manufacturing and industrial sector for the country’s growth and consumes around 40% of the world’s copper, therefore the ongoing rhetoric is the extent of how the trade dispute will impact real copper demand in China. China is still heavily reliant on its manufacturing and industrial sector for the country’s growth and consumes around 40% of the world’s copper. Despite all this, a supply squeeze resulting from falling inventories may keep copper on track for gains in the long-term. Announcements of new projects and mining operations from global corporations such as BHP Billiton and Glencore in the near future are likely to have an effect on both copper prices and company share prices. Going forward, rising copper prices could indicate gradual positive sentiment returning to the stock market after significant declines and volatility in the US market over the past few days panicked investors. Indices such as the CSI 300, DJI, S&P 500 and the ASX 200 could experience noteworthy movements on the back of copper prices. Any economic data releases suggesting a slowing Chinese economy may indicate a falling global demand for copper. Conversely, a fatiguing US-China trade war could lead to an improvement in concerns for the global economy and in turn see a rallying of copper levels. Keep on top of important updates and possible trading opportunities using the chart analysis options and ‘News’ feature on our online platform (as highlighted in the image below).
  14. U.K. monthly average earnings and monthly unemployment release today at 9:30 BST. Earnings forecast to be stable at 2.6% whilst the unemployment rate is forecast to be 4%. The releases could be an important signal to the current economic health of the UK. The US federal budget deficit rose 17% to $779 billion in the 2018 fiscal year due to a surge in government spending. EM currencies rallied to a 2-month high as the Turkish Lira leads the way, climbing as much as 2.1%. The Brazilian Real and the SA Rand were also up, bolstered by the weaker Dollar caused by lower than expected US retail figures. China confirms a CPI (YoY) of 2.5% recovering two figures from the previous 2.3%. Oil prices could surge to all-time highs and ricochet across the global markets if the US imposes economic sanctions on Saudi Arabia amid heightened tensions over the disappearance of journalist Jamal Khashoggi. Bitcoin, Ether and Ripple jump in price as investors shift confidence from the dollar-pegged Tether. Asian overnight: A mixed session has seen Japanese and Australian markets gain ground despite losses throughout the Chinese and Hong Kong indices. Continued US trade war concerns are causing the market sentiment to remain weighed down. The Nikkei was the one standout performer, gaining over 1% amid a JPY sell-off overnight. Data-wise, the Chinese CPI reading saw a notable rise to 2.5% as expected, causing gains in the AUD. Although these have been largely erased as the RBA minutes pointed towards continued low interest rates. The AUD unemployment rate change due on Thursday is important to consider and could see volatility around the AUD/USD. The expected figure is 5.3%. Germany is set to release the Import Price Index and the ZEW survey about economic sentiment at 10am BST. UK, US and Europe: The European session will be of particular interest today, with UK jobs in focus. Keep an eye out for the average earning figure. Yesterday’s schedule for the Italian coalition to put forward their new budget to the EU has been pushed, and as such we should see this come into play today. With the Italians expected to stand resolute for now, there is a good chance of 10Y yields rising further. With the US and Saudi Arabian relationship potentially turning sour, keep an eye out for oil prices which could spike in the event that Trump decides punitive action is necessary. Going forward, Germany is set to release the Import Price Index and the ZEW survey about economic sentiment. The data is forecast to be -9.1 vs the previous -7.2 in Europe. Volatility surrounds Italy as they await EU’s verdict with the Italian cabinet raising next year’s target budget deficit from 1.8% to a sharp 2.4% of GDP. A key thing to watch out for is the spread between the Italian BTP and the Bund as it is currently well above 300 - an increasing spread is indicative of rising volatility and uncertainty, especially for the banking sector. The EU leader summit this week is also likely to affect the markets as Prime Minister Giuseppe Conte is set to give a speech, whilst EU negotiator Michel Barnier will present a form of Brexit conclusion. In preparation for Brexit, Coinbase has planned to move to Dublin as part of their expansion in the EU and to retain the benefits of passporting for EU companies. Economic calendar - key events and forecast (times in BST) Source: Daily FX Economic Calendar 9.30am – UK employment data: August unemployment rate to hold at 4%, and average earnings including bonus to rise 2.4% in August from 2.6%. September claimant count to rise to 10,000 from 8700. Market to watch: GBP crosses 10am – German ZEW (October): economic sentiment to fall to -14 from -10.6. Market to watch: EUR crosses Corporate News, Upgrades and Downgrades Meggitt has upgraded revenue guidance, with organic revenue growth expected to rise 7-8%, from a previous 4-6%. Stronger-than-expected Q3, up 6%, drove the improvement. Merlin Entertainments reported a rise in revenue, but warned that the cost environment was ‘challenging’. Tighter labour markets across the globe have put pressure on wage costs. British American Tobacco has revised down its full-year revenue target for next-generation products, due to a flat market in Japan and a product recall in the US. US retail giant Sears files for bankruptcy after failure to meet a $134m repayment. Cepsa, the Spanish oil and gas company, pulls its IPO plans amid market turmoil. This follows on from our piece yesterday on the correlation between IPOs and volatility. Admiral upgraded to buy at Goldman Aggreko upgraded to outperform at RBC Antofagasta upgraded to outperform at Macquarie Homeserve upgraded to buy at Citi ConvaTec downgraded to neutral at JPMorgan Intu downgraded to neutral at Citi Superdry downgraded to hold at Stifel Smith & Nephew downgraded to hold at HSBC 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.
  15. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3 percent, while Japan's Nikkei dropped 0.5. Global bond sell-off triggers the biggest decline in US equities in nearly four months. As 10-year treasury yields surge to the highest level since 2011, fears that current rates could restrain growth has hit stocks across the US, Europe and Asia. FTSE 100 posting its biggest drop since August yesterday. The Dow Jones drops more than 250 points as treasury yield rates surge, while the S&P 500 lost 0.82 percent and the Nasdaq Composite dropped 1.81 percent. In EM the Indian rupee has strengthened going into the RBI interest rate decision. After significant devaluation of the Turkish lira recently, it looks like the re-balancing of its economy is under way as the trade ministry report an increase in exports. This has been faster and stronger than expected. US non-farm payroll release today. US Labour department forecasts an increase of 185,000 in non-farm payrolls last month and the unemployment rate is expected to fall by 0.1% to 3.8% - an 18 year low. Asian overnight: Once again it is the Australian ASX 200 which provides the one outlier to a wider bearish story within Asia, where China remains the notable absence for the duration of the week. Data-wise, the Australian economy received a boost in the form of a stronger retail sales number, coming in at 0.3% as expected. Emerging market currencies have been under pressure this week, and the Indian Rupee is in focus today, the RBI expected to raise rates later in the morning. As always any USD cross will likely experience significant volatility around NFP UK, US and Europe: The US Treasury yield is making headlines and often seen as a ‘safe haven’ or risk free investment over periods of potential uncertainty. A rising curve is generally seen as negative across other asset types. Wall Street also took a hit as FANG stock drew blood as investors and speculators begin to price in a potential acceleration in inflation. Continued positives in jobless claims and factory orders out yesterday all painted a good picture for the US economy, nicely lining up the non farm payrolls figure due at 1.30pm BST. As always any USD cross will likely experience significant volatility around this time, along with most assets quoted in USD. Bond markets, oil, and inelastic soft commodities may also see fallout. A relatively quiet European session today sees very little in the way of major market moving events, where the German factory orders has already been released before the bell (up to 2% vs 0.7% expected). Following yesterday’s relative lull in data, today sees all eyes turn towards the US once more, with the jobs report due out alongside the Canadian version. The rise in yields off the back of strong US data on Wednesday is likely to come back into play for traders. Those following this trade should keep an eye on the jobs numbers, as a similar outperformance is expected to bring another surge. Meanwhile, coming off the back of the US-Canada trade deal, the Canadian dollar could receive another boost with markets expecting an improved employment change and unemployment rate today. Economic calendar - key events and forecast (times in BST) Source: Daily FX Economic Calendar 1.30pm – US non-farm payrolls (September), balance of trade (August): forecast to see 185K jobs created from a reading of 201K a month earlier. The unemployment rate is expected to fall to 3.8% from 3.9%, while average hourly earnings rise 0.2% MoM from 0.4%. Trade deficit to narrow to $50 billion from $50.1 billion. Markets to watch: US indices, USD crosses 1.30pm – Canada employment (September): 11,400 jobs expected from a drop of 51,600 a month earlier. Market to watch: CAD crosses Corporate News, Upgrades and Downgrades Lenovo shares drop 20% following report over alleged Chinese spy chips. Unilever withdraws proposal to simplify dual structure. Danske Bank confirmed yesterday that the US DoJ is investigating potential money laundering activity and that they’re received a ‘request for information’. Danish regulators have said they want the bank to increase their capital reserves, whilst Danske themselves recently confirmed they’re going to stop a share buy back program. Shares are down nearly 40% from the beginning of the year. Intu Properties faces a takeover by its largest investor, Peel Group, in a multi-billion pound deal. Toyota recalling over 2.4 million hybrid vehicles over battery faults. Centamin has lowered gold production guidance for the year, with output now expected to be around 480,000 ounces, below the 505-515K oz. However, Q3 production was up 27%. Intertek Upgraded to Buy at Berenberg Eutelsat Upgraded to Buy at Goldman Proximus Upgraded to Overweight at JPMorgan Helvetia Downgraded to Hold at Baader Helvea Antofagasta Downgraded to Sell at Goldman 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.
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