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  1. The EU has indicated that Theresa May needs to get backing from parliament on her Brexit deal before they agree to delay the UK's withdrawal from the EU. The Prime Minister is heading to Brussels today for the European Council meeting to try to force an extension in order to avoid a no-deal scenario. US bank stocks traded lower yesterday after the Fed's announcement that there will be no rate hikes in 2019, Goldman was down 3.4% whilst BoA, J.P. Morgan Chase, Citigroup and Morgan Stanley all fell by 2% or more. In turn, both Dow and S&P traded lower whilst the Nasdaq edged 0.1% higher than its previous close. The Dollar was down against most major pairs due to the announcement, Bloomberg's Dollar Spot Index fell 0.5% to a six-week low. Asian equities closed higher, the MSCI Asia-ex Japan Index was up 0.45% whilst the Shanghai composite was up 0.72%. Gold traded 0.4% higher yesterday to $1,318.05 per troy ounce. Asian overnight: It was a mixed session in Asia, with falls in Australia offset by small rises in South Korea and Hong Kong, while Japan is closed for a public holiday. A dovish Fed provided an initial boost for US markets, but it was not enough to sustain the rally, and equities lost ground. It is expected that Steve Mnuchin and Robert Lighthizer will travel to China next week for further trade talks, but a lack of progress in these talks is beginning to weigh on markets. UK, US and Europe: After dovish turns from the ECB and the Fed, all eyes will be on the Bank of England, while a European Council meeting may discuss the UK’s request to extend Article 50. In addition we have UK retail sales, a Philly Fed reading and eurozone consumer confidence. Looking at Brexit, news broke yesterday that Macron will veto any delay to the Brexit process to avoid any further uncertainty, according to a French media report. If this is true, it puts the UK on the brink of a no-deal Brexit as Theresa May heads to Brussels today in a bid to desperately avoid this scenario. High profile Brexiteer Jacob Rees-Mogg was delighted to hear this news as he tweeted "If true, then Vive la France". Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 9.30am – UK retail sales (February): sales to rise 0.2% MoM and 3.4% YoY. Markets to watch: GBP crosses 12pm – BoE meeting:policy expected to be left unchanged, but Brexit likely to dominate the discussion. Markets to watch: GBP crosses 12.30pm – US Philadelphia Fed index (March): expected to rise to 3.2 from -4.1. Markets to watch: USD crosses 3pm – eurozone consumer confidence (March):confidence to fall to -10.8 from -7.4. Markets to watch: EUR crosses 11.30pm – Japan CPI (February):CPI to be 0.4% YoY and core CPI to hold at0 .8% YoY. Markets to watch: JPY crosses Corporate News, Upgrades and Downgrades Halma said that it expected annual adjusted pre-tax profits to meet markets forecasts thanks to strong growth in its US and UK divisions. Next reported a 2.6% rise in total group sales for 2018, while group profit fell 0.4% to £722.9 million. The retailer said that it saw no effect so far from Brexit, and that a no deal Brexit would lead to reductions in prices if the indicative tariffs are brought in. Ted Baker said that group pre-ta profit for 2018 fell 26.1% to £50.9 million, while sales rose 4.2% to £461 million. Enquest will keep its focus on cutting debt, after earnings in 2018 more than doubled to $716.3 million. Bouygues upgraded to outperform at MainFirst EasyJet upgraded to neutral at MainFirst ING Groep raised to outperform at RBC Ryanair upgraded to outperform at MainFirs Bodycote downgraded to hold at Berenberg Compass downgraded to sell at Goldman Lookers downgraded to neutral at JPMorgan IAG downgraded to neutral at MainFirs 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. Theresa May has announced that she has secured "legally binding changes" to the withdrawal agreement ahead of the pivotal vote on her deal in the House of Commons this evening. Specifically, the changes mean that the Irish backstop would not "become permanent". The pound soared after the news broke rising to a high of $1.3290 before falling back down to its current level of $1.3208, still up over 2% from Monday's low. Boeing shares have fallen over 5% after the fatal plane crash in Ethiopia, which killed all 157 people on board. Multiple airlines have grounded Boeing's 737 MAX 8 aircraft as the disaster on Sunday was the second in five months involving the new Boeing aircraft. Strong gains within the US technology sector offset the decline in Boeing as the Dow closed 200 points higher. The Nasdaq also rose 2% followed by the S&P which gained 1.45%. Apple has announced an event for the 25th of March where it is widely anticipated that the company will announce a TV streaming and news subscription service to rival Netflix. The event invitation includes the caption "It's show time". Gold added 0.2% to $1,296 per ounce. Asian overnight: A bullish session overnight saw gains from Chinese, Japanese, and Hong Kong shares, with the Australian ASX 200 index trading marginally lower. Much of the positive sentiment came thanks to a strong US session, as the topic of US-China trade talks came back into play. With Chinese state TV reporting that vice-premier Liu He, Robert Lighthizer, and US trade representative and Steven Mnuchin spoke on the phone, there is hope that talks could soon resume. The pound is the currency to watch today... UK, US and Europe: However, it was Brexit that caused the most volatility overnight, with the pound gaining sharply off the back of a seemingly successful last-minute dash to Strasbourg by Theresa May. Legally binding amendments to the withdrawal agreement have raised hopes that her deal could be approved in today’s vote. While the vote is almost certain to be closer than last time, the day will be dominated by commentary across the political spectrum which should highlight what chance it really has. Thus, the pound is the currency to watch today, with UK GDP (monthly), manufacturing production, industrial production, and trade balance data all being released to heighten that focus. Also keep an eye out for US CPI inflation data released later in the day. South Africa: Our local bourse looks set to open firmer this morning following firmer US Index Futures and Asian equity markets. There has been suggestion of progress between the US and China in trade negotiations, and in turn markets grow optimistic of news to come. Markets have also been encouraged by Theresa May having adjusted the terms of a Brexit deal with the EU, which will be voted upon this evening by UK parliament. The dollar trades softer and commodities trade higher this morning. The rand has also managed to claw back some of its recent losses on the short term improved risk appetite. Tencent Holdings is up 1.4% in Asia, suggestive of a positive start for major holding company Naspers. BHP Group is up 1% 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 UK Parliament votes on Withdrawal Agreement 9.30am – UK GDP (January): growth to rise 0.1% MoM, while the three-month average holds at 0.2%. Market to watch: GBP crosses 12.30pm – US CPI (February): inflation to be 1.6% YoY and 0.2% MoM, while core falls to 2.15 YoY and holds at 0.2% MoM. Market to watch: USD crosses 11.30pm - Australia Westpac consumer confidence: index expected to fall to 102.5 from 103.8. Market to watch: AUD crosses Corporate News, Upgrades and Downgrades Wood Group has won a ‘multi-million dollar’ construction contract from IR1 group relating to a biofuels facility in Oregon. Sirius Minerals said that it had been approached by a ‘major global financial institution’ with an alternative funding proposal. Other proposals continue to be pursued. Domino’s Pizza reported a 1.1% drop in pre-tax profit for 2018, to £93.4 million, while sales rose 9% to £1.26 billion. Weak growth in its international division hurt performance. Struggling retailer French Connection has said that it has begun"preliminary discussions with several interested parties" regarding the sale of the company. Befimmo upgraded to buy at ING Clarkson upgraded to overweight at JPMorgan Lloyds upgraded to neutral at Goldman P2P Global Investments upgraded to buy at Canaccord Antofagasta downgraded to sector perform at RBC Standard Life Aberdeen cut to underperform at RBC Munich Re downgraded to hold at Bankhaus Lampe Standard Chartered downgraded to reduce at AlphaValu 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. Reports over the weekend have indicated that the US and China are in the later stages of trade talk discussions in a deal which could see tariffs and sanctions lifted on both sides. Donald Trump tweeted over the weekend asking China to remove all tariffs on agricultural products and that trade talks are "moving along nicely". Asian equity markets reacted positively to the trade talk progress; the Nikkei rose 1%, whilst the Shanghai Composite increased by 2.5% and the Hang Seng jumped 1.2%. Theresa May has announced a £1.6bn fund for pro-Brexit constituencies which would be used to boost economic activity in these areas, although some believe she is doing this purely to "bribe MPs" in voting for her withdrawal agreement. WTI Oil rose 0.3% to $55.96 per barrel due to signs of slowing US production and OPEC continuing their cutbacks. Gold increased by 0.1% to $1295 per ounce. Ted Baker CEO Ray Kelvin has resigned from the company, which he founded in 1988, with immediate effect due to allegations of inappropriate behavior. The news adds to the turbulent couple of weeks for the retailer as the company issued a profit warning last week. Asian overnight: A positive start to the week has seen Asian markets push higher ahead of a crucial week of economic data. Optimism over a potential US-China trade deal continue to add fuel to the fire for bulls, with a mooted summit between Xi Jinping and Donald Trump on 27 March raising the prospect of a final deal. Looking ahead, a somewhat slow start to a busy week sees the UK construction PMI dominate. With the survey falling sharply towards contraction territory (50.6), all eyes will be focused on whether we see a continuation of that weakness seen last month. UK, US and Europe: Mrs May has come under-fire over her new £1.6bn 'Stronger Towns Fund', which she says will create jobs and boost economic activity in pro-Brexit towns. The PM outlined that "communities across the country voted for Brexit as an expression of their desire to see change - that must be a change for the better, with more opportunity and greater control". Although, some people have suggested that this is a "desperate measure to buy votes" in order to push her withdrawal agreement over the line as it has been announced just days before MPs are scheduled to vote on her Brexit deal. South Africa: Global equity markets continue to trade higher on optimism that the US and China could be nearing a trade deal. While the dollar has softened a bit this morning it comes off the back of significant strength on Friday after the US posted better than expected GDP data. Gold trades back below the $1300/oz mark in part due to the stronger dollar and reduced safe haven demand for the precious metal on improving trade relations (with China). The rand is back above the R14/$ mark. Tencent Holdings is up 3.3% in Asia suggestive of a strong start for Naspers. The BHP Group is up 1.2% higher 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 9.30am – UK construction PMI (February): forecast to fall to 50.1 from 50.6. Markets to watch: GBP crosses Corporate News, Upgrades and Downgrades Senior has reported a 17% rise in annual profit, with pre-tax profit hitting £61.3 million. Revenue rose 5.7% to £1.08 billion. British American Tobacco said it was ‘extremely disappointed’ that the Quebec court of appeal had not overturned a decision against its Canadian subsidiary. 888 has bought BetBright’s sports betting platform for £15 million. Aviva has announced Maurice Tulloch as its new CEO this morning, Mr. Tulloch has been at the company since 1992 and takes over from Mark Wilson. Ageas upgraded to hold at HSBC Carlsberg upgraded to outperform at RBC Sievi Capital upgraded to accumulate at Inderes Evolution Gaming raised to buy at Kepler Cheuvreux Acciona downgraded to neutral at Citi Centamin downgraded to neutral at CI Capital Heineken downgraded to sector perform at RBC Victrex downgraded to sell at Cit 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. Marks & Spencer and Ocado have officially confirmed a deal whereby M&S will buy a 50% share of Ocado's retail business in a £750m home delivery deal, a huge transformational step for the iconic retailer. M&S will finance the deal by offering a £600m rights issue to shareholders and cutting dividend payouts by 40%. President Trump and North Korean leader Kim Jong-Un are set to meet today in an attempt to end North Korea's nuclear program in exchange for a relief in sanctions by the US. Ahead of the Trump-Kim meeting stocks in Asia generally increased, the Hang Seng rose 0.48% followed by a 0.44% gain with the Nikkei. The Chinese markets mirrored these gains as the Shanghai composite increased 0.8% and the Shenzhen composite by 0.4%. US Index futures edged lower after the CME Globex markets stopped trading due to a technical issue with the exchange, the Dow dipped by around 29 points followed by small decreases with the S&P and Nasdaq. Theresa May promised MPs a vote to delay Brexit if her withdrawal agreement fails to get through Parliament on the 12th of March. MPs will have the chance to vote on two separate votes, one being to support a no-deal Brexit and the other to extend the deadline beyond the 29th of March. Sterling dipped slightly to $1.3251, down 0.1%, coming of the back of Tuesday's rally. Gold dropped to 0.1% to $1,327.4 per ounce. Asian overnight: The bulls were back in the driving seat overnight, with gains across the board coming in the wake of Fed chair Powell’s reiteration of a ‘patient’ stance. We are also seeing continued optimism surrounding US-China talks, with Trump’s two-day meeting with Kim Jong-Un providing further hopes of regional stabilisation. Meanwhile, the New Zealand trade balance took another negative turn, falling sharply back into deficit after a mere single month of surplus. UK, US and Europe: Looking ahead, an appearance from Bundesbank President Weidmann provides the one point of interest in an otherwise quiet eurozone session. In the UK, Brexit is back on the agenda, with a series of amendments being voted on which could shape the process for leaving the EU. However, with Theresa May already setting out a new sequence of events to allow for a potential extension, these are largely a formality. Also keep an eye out for Canadian CPI, alongside US trade balance, factory orders and crude inventories. Finally, with Jerome Powell returning for a second day of testimony in Washington, watch out for potential dollar volatility. South Africa: Global markets are trading mixed with US index futures modestly lower, while Asian equity markets trade marginally firmer on the day. In turn, our local bourse is expected to open flat to slightly higher this morning. Precious metal prices remain firm (platinum in particular) trading near short term highs, while base metals trade mixed with copper up and iron ore down on the day. The rand has managed to firm against the majors. There is little in the way of high impact data scheduled for release today, although markets will look to the continued testimony of Fed Chairman, Jerome Powell this afternoon for directional guidance. Tencent is down 0.5% in Asia, suggestive of a softer start for major holding company Naspers. The BHP Group is up 0.4% in Australia, suggestive of a positive start for local diversified resource counters. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 10am – eurozone business confidence (February): forecast to rise to 0.75 from 0.69. Market to watch: EUR crosses 1.30pm – Canada CPI (January): prices expected to rise 1.7% YoY. Market to watch: CAD crosses 3pm – US pending home sales (January): sales expected to fall 1.9% MoM and 11% YoY. Markets to watch: US indices, USD crosses 3.30pm – US EIA crude inventories (w/e 22 February): stockpiles rose by 3.7 million barrels last week. Markets to watch: Brent, WTI Corporate News, Upgrades and Downgrades Marks & Spencer will launch a rights issue and cut its dividend in order to pay for a joint venture with Ocado. M&S will pay Ocado £750 million for its half of the venture, with a £600 million rights issue and a 40% cut to the dividend. Rio Tinto said that net earnings rose 56% to $13.64 billion for 2018, while underlying earnings rose 2% to $8.81 billion. ITV said that 2018 pre-tax profit was up 13% to £567 million, while revenue was up 3% to £3.77 billion. Advertising revenue was weak, but growth in online activities offset this. Taylor Wimpey reported an 18% rise in pre-tax profit, to £810.7 million, for 2018 while the number of completions rose and margins grew. The firm said it had a made a positive start to 2019. Freenet upgraded to hold at Berenberg Total upgraded to outperform at RBC Viscofan upgraded to hold at Santander Air France-KLM cut to equal-weight at Morgan Stanley Metro Bank downgraded to market perform at KBW Tullow downgraded to hold at Jefferies Shell downgraded to sector perform at RB 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. Despite announcing a loss of 4 cents per share Snap shares soared in after-hours trading as the social media giant beat analysts expectations, the general consensus was that the company would report a net loss of 8 cents per share in Q4. Disney also beat expectations aided by the launch of its streaming service ESPN+ and sales increases in its theme park businesses, earning per share came in at $1.84 vs $1.55 expected. The Dow rose by 172 points, followed by a 0.47% increase in the S&P fueled by gains in the communication services and technology sector. The Nasdaq also saw a gain of 0.7% and closed at 7,402. President Trump announced on Tuesday that he will meet with Kim Jong Un in Vietnam at the end of February. Although progress has been made, the president believes a lot of work still needs to be done. Overall, we saw a largely subdued session in the Asian market due to the Lunar New Year holidays, with the exception of moves in the Australian markets. The Australian dollar fell by almost 1.3% against USD as the Reserve Bank of Australia said that rates could fall if unemployment increases and inflation stays too low. Gold slipped to $1,314.30 per ounce, a 0.1% drop from its previous close. If I had not been elected President of the United States, we would right now, in my opinion, be in a major war with North Korea Asian overnight: A somewhat subdued session overnight saw marginal gains in the ASX 200 and the Nikkei, while the Topix lost ground. Chinese and Hong Kong markets remained closed for the Lunar bank holidays. The Australian dollar was the big mover overnight, after the RBA governor Lowe signaled that the next move could be to cut rates rather than raise them. Meanwhile, Donald Trump’s state of the union address provided little of note for markets, with the President focusing on further promises to build a wall rather than laying out solutions to the impasse in US-China trade negotiations. UK, US and Europe: Trump addressed Congress during his second State of the Union on Tuesday night, announcing that he will meet the North Korean leader between the 27th - 28th of February. The two leaders met last year in Singapore which, according to Trump, was a huge success as he claimed that North Korea's nuclear weapons were no longer a threat to the US. In his address he acknowledge that there is still a lot of progress that needs to be made between the two countries, but claimed that "If I had not been elected President of the United States, we would right now, in my opinion, be in a major war with North Korea". Looking ahead, the early release of German factory orders represents the sum total of a quiet European session. Meanwhile, US trade balance, alongside US crude inventories provide the only major releases to watch out for in the afternoon. South Africa: US Index futures are pointing to a flat start to the day. The Shanghai Composite and Hang Seng Index are closed this morning on account of Lunar Holidays being celebrated within the region. With market moves minimal this morning there appears to be little in the way of scheduled news data to guide markets for the rest of the day. Commodity prices are relatively unchanged this morning and the rand trades at similar levels to where it closed yesterday. The BHP Group is up 1.67% higher in Australia suggestive of a positive start for local miners. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 1.30pm – US trade balance (November), GDP growth (Q4 preliminary): trade deficit to narrow to $54 billion from $55.5 billion, and GDP expected to grow by 2.6% QoQ, from 3.4%. Markets to watch: US indices, USD crosses 3pm – Canada Ivey PMI (January): previous reading 59.7. Market to watch: CAD crosses 3.30pm – US EIA crude inventories (w/e 1 February): stockpiles rose by 919,000 a week earlier. Markets to watch: Brent, WTI Corporate News, Upgrades and Downgrades Apple has announced its retail chief, Angela Ahrendts, is set to leave the company in April citing "new personal and professional pursuits" as the reasoning behind her move away from the tech giant. Toyota cuts it net income outlook for 2019 due to "changes in US taxation rules" and "losses from equity sales". Severn Trent still expects to report full-year performance in line with forecasts, with its biggest capital spending plan in a decade on track. Redrow said that pre-tax profit rose 5% to £185 million for the first half, while revenue rose 9% to £907 million. The dividend was raised by 11%, to 10p per share, while a cash payment of 30p per share will also be paid. Victrex suffered an 18% fall in first quarter revenue, due to weakness in the automotive and consumer electronics markets. The firm said that it had seen some improvement in January and February. Profits at Daimler, the owner of Mercedes-Benz, decreased by nearly a third last year as earnings came in at €7.6bn down from €10.6bn previously. Interserve has announced this morning that they have reached a deal with creditors to cut its debt by issuing new shares through a rights issue, indicating that it will reduce liabilities by around £325m Alstria Office upgraded to buy at Kempen BP upgraded to buy at DZ Bank National Grid upgraded to outperform at RBC Paddy Power upgraded to hold at HSBC EON downgraded to underperform at Jefferies LVMH downgraded to hold at Jefferies Royal Mail downgraded to sell at SocGen TUI 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.
  6. Coffee giant Starbucks announced that same-stores sales grew by 4% in its home US market, with overall revenue also beating expectations. Speaking about the results, CEO Kevin Johnson said that "Our streamline efforts over the past six quarters are paying off by allowing us to bring more focus and discipline to our three strategic priorities". Talks are continuing in the US as the Senate tries to reach an agreement to end the government shutdown, which is now in its 34th day. The White house is pushing for "large down payments" for Trump's wall, however the Senate has already rejected two proposals as a deal including wall money "is not a reasonable agreement between senators". CEO of Goldman Sachs, David Solomon, has warned that investment into the UK could take a hit due to a hard Brexit as he told the BBC that Goldman has stopped hiring in the UK over the last two years. Westminster is due to vote on the withdrawal agreement from the EU again next week. Asian equities rose due to a rally in the technology sector, despite the continued uncertainty over US-China trade talks. The Hang Seng increased by 1.3%, followed by a 1% rise in both the MSCI Asia Pacific Index and Japan's Topix. Brent crude futures jumped 1.2% to $61.80 followed by WTI crude which rose by 1.3% to $53.82 per barrel, as the US indicates that they may impose sanctions on Venezuela's oil exports due to the continued political turmoil within the country. Gold remained steady at $1,282.08 per ounce. UK, US and Europe: Airbus issued a warning yesterday over Brexit, the company indicated that they may shift future wing-building out of the Britain if the UK end up in a no-deal scenario. As stated above, Goldman Sachs support the view of Airbus both of whom employ a considerable number of people in the UK, with the aerospace group employing around 14,000 people alone. Despite the doom and gloom the pound is up around 1.8% since Monday, due to investors speculating that the UK will likely avoid a hard Brexit. Despite the doom and gloom the pound is up around 1.8% since Monday US markets continue to flounder, having essentially gone nowhere all week, as trade concerns remain at the forefront of investors' minds. One bright spot was the semiconductor index, which rose 5.7%, enjoying its best day since 26 December. Markets are still unable to establish a clear direction, although the lack of any renewed sell-off similar to what we saw in December is helping to calm nerves. The German IFO index is the one event of note today, with the week otherwise set to end on a quiet note. There seems no end in sight to the US government shutdown, with Monday's scheduled barrage of US data unlikely to take place unless a resolution is found over the weekend. South Africa: We expect a positive start to equity markets this morning as US Index Futures trade firmer, led by the Nasdaq, while Asian markets trade firmer led by the tech sector as well. Comments that US President Donald Trump is optimistic about the current trade negotiations have helped lift sentiment in the near term. However the US secretary of Commerce is less optimistic and has commented that US and China remain far away from reaching a trade deal. The US dollar has since weakened against a broad basket of currencies. In turn we see the rand gaining ground to trade at its best levels of the week. Tencent Holdings is up 3.27% in Asia suggestive of a strong start for major holding company Naspers. BHP Group is up 1.3% higher 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 9am – German Ifo business climate index (January): expected to rise to 101.5, from 101. Market to watch: EUR crosses Corporate News, Upgrades and Downgrades Vodafone reported a 6.8% drop in revenue for the final three months of 2018, to €11 billion, but annual underlying organic adjusted earnings growth is still expected to be around 3%. AG Barr said that it expected full-year revenue to be up 5% over the year, thanks to strong performance across all brands. Indivior said that a US court had granted a temporary restraining order to prevent rival Alvogen from launching copycat drugs for its opioid addiction treatments. Deutsche Boerse Upgraded to Hold at Bankhaus Lampe Iberdrola Upgraded to Buy at HSBC NCC Upgraded to Buy at Citi AstraZeneca Upgraded to Buy at Shore Capita Swiss Life Downgraded to Neutral at MainFirst Intu Downgraded to Sell at Goldman Adecco Downgraded to Reduce at Oddo Fevertree Drinks Cut to Hold at Jefferie 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. Theresa May's government holds onto power, winning a no-confidence vote in parliament last night by 325 votes to 306. The Prime Minister has now set out to reach a cross-party solution for Brexit, although this will be extremely difficult as the PM was snubbed by the leader of the opposition last night saying that she is in charge of a "zombie government". Sterling remained steady as the currency traded around the 1.2875 mark against the dollar after, as expected, Mrs May's government won the vote of no-confidence. US equities closed higher on Wednesday after strong quarterly earnings by Bank of America and Goldman. The S&P 500 rose by 0.2% whilst the Dow increased by 140 points, both driven by the financial sector. The Nasdaq followed and increased by 0.15%. Stock markets in Asia were mixed as concerns continue over rising tensions between the US and China. Japan's Topix gained 0.4% at the close, followed by the MSCI Asia Pacific Index which added 0.1%. On the other side of this, the Shanghai Composite and the Hang Seng both slid by 0.1%. Oil slipped 0.5% down to near $52 per barrel as the US reach record output levels, counter-acting the signs of shrinking supply by OPEC+. Gold traded slightly lower at $1,291.65 per ounce. UK, US and Europe: Calls from the opposition and some leading Brexiteers for the Prime Minister to resign seems to have fallen on deaf ears. Last night, Theresa May's government survived a vote of no confidence tabled by Jeremy Corbyn, winning the vote by 325 to 306. It's unclear what is going to happen next in these extraordinary circumstances. Mrs May will seek further concessions from the EU in an attempt to get her 'Plan B' deal through the House of Commons, which the PM must layout to parliament next week. Looking ahead, earnings season continues with Netflix, Morgan Stanley and Taiwan Semiconductor posting results later today. It's unclear what is going to happen next in these extraordinary circumstances... South Africa: Last night saw US markets trading in positive territory led by gains within the banking sector after The Bank Of America reported better than expected earnings. Asian markets and US Index futures are however trading lower this morning tempering the previous days gains somewhat. Last night saw British Prime Minister Theresa May surviving a vote of no confidence in parliament, helping restore some stability in the British Pound. Oil and precious metal prices are trading modestly lower this morning, while base metals are trading positive on the day. Tencent Holdings is up 0.8% in Australia, suggestive of a similar start for major holding company Naspers. BHP Billiton is down 0.2% in Australia suggestive of a slightly weaker start for locally listed diversified resource counters. The South African Reserve Bank (SARB) concludes its monetary policy meeting today where no change in lending rates is the expected outcome. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar Corporate News, Upgrades and Downgrades Primark announce this morning that like-for-like sales fell in the 16 weeks to the 5th of January caused by reduced footfall during November, according to the retailer. Fiserv is set to acquire payment processor First Data in a deal worth $22 billion in one of the largest deals we have seen in the financial technology industry. Bank of America shares soared by 7% yesterday after quarterly profit reached a record level of $7.3 billion. Goldman Sachs also beat expectations yesterday as earnings per share reached $6.05, beating estimates of $4.53, and posting revenue of $8.08 billion for the quarter. In a statement, CEO David Solomon said "We are pleased with our performance for the year, achieving strong top and bottom line results despite a challenging backdrop for our market-making businesses in the second half". Asset manager firm BlackRock profits fell short of expectations as the company's assets under management has fallen 5% over the last 12 months down to $5.98 trillion. 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. The US government remains in shutdown as Donald Trump addressed the nation yesterday on border security in an attempt to gain support and funding for his wall, claiming that there is a "Humanitarian and National Security crisis" in the US. A positive session for US equities yesterday amid US-China trade discussions optimism, the S&P increased by 0.97% whilst the Nasdaq rose 1.1%. The Dow climbed 250 points, as it registers its first three day positive streak since November last year. Asian shares also rallied due to the trade talks progress, the Shanghai Composite and Japan's Topix both rose by around 1.1%. Adding to this, Australia's ASX index climbed 1% whilst the biggest percentage increase came from Hong Kong's Hang Seng, which gained 2.4%. Oil prices followed the positive results from equities and increased by over 1%, WTI crude breached $50 per barrel for the first time since December whilst Brent was up 1.3%. Sterling and the Euro both appreciated against the Dollar, with the pound up 0.2% to $1.2741 followed by the Euro which is also up 0.2% to $1.1466 Flights at London's Heathrow airport were temporarily grounded yesterday evening as the military were called in after sightings of a drone, this is the second time in two months a drone has halted flights at major UK airports. UK, US and Europe: Investors are becoming more positive on the outlook of the global economy after somewhat recovering from the last years bear market, which was the worst year we have seen for equities since the financial crisis. Trade talks between the US-China are progressing which has caused equities to rally, especially US tech companies. FAANG stocks have experienced huge increases between Christmas Eve through to Tuesday's close with Netflix and Amazon being the biggest gainers, surging by 27% and nearly 37% respectively. Ryan Nauman, market strategist of Informa Financial Intelligence, has explained that "investors noticed that the FAANG stocks are solid companies and their valuations came down a lot after the big sell-off" and also alluded to the correlation between trade talks and performance of these stocks. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar Corporate News, Upgrades and Downgrades Reports are emerging that Apple is cutting production of its iPhone by 10% between January and March, this comes after the company reduced its revenue projections for 2019. Ted Baker announce that retail sales increased by 12.2% for the five week Christmas period to January the 5th, with online sales leading the way by increasing 18.7%. Saisnbury's posted disappointing Christmas sales this morning as like-for-like performance slipped by 1.1% over the Christmas period, with the retailing indicating its decision to reduce promotional activity has adversely impacted sales. Another retailer to post concerning results this morning is Mothercare, as like-for-like sales fall by 11% for the 13 week period to the 5th of January. 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. Asian equities began the new year in the red as Chinese manufacturing had a worse December than expectations, PMI dropped to 49.7 from 50.2 in November. Hong Kong's Hang Seng fell by 2.4% and the Shanghai Composite declined by 1.2%, while the ASX 200 dropped by 1.6%. S&P futures mirrored the performance of Asian stocks and fell 0.9%, erasing earlier gains after Donald Trump indicated he may be willing to strike a deal to end the government shutdown in the US. Indian stocks also dropped as fiscal deficit concerns grow due to lower tax collection and a potential farm relief package proposed by Prime Minister Narendra Modi, whom is seeking re-election this year. The NSE Nifty 50 declined by 0.3%. The yen reached a six month high at 109.36 per dollar, rising 0.3%. The Aussie dollar fell 0.5%, whilst the Euro and pound were both down around 0.15% each. Investors 'safe haven' gold rose 0.3% to $1,286.04 per ounce. WTI crude slipped to $44.97 per barrel, falling around 1%, whilst Brent crude futures were down 1.4% to $53.05. Investors started the year concerned about the global economy coming off the back of the worst year for equities we have seen since the global financial crisis Asian overnight: Investors started the year concerned about the global economy coming off the back of the worst year for equities we have seen since the global financial crisis in 2008. China's manufacturing contracted for the first time in 19 months in December as a result of continued trade tensions between the US. Results from the Purchasing Managers' index (PMI), dropped to 49.7 in December, a reading below 50 generally indicates a contraction in manufacturing activity. The director of macroeconomic analysis at CEBM group explained that the results "showed external demand remained subdued due to the trade frictions between China and the U.S., while domestic demand weakened more notably". UK, US and Europe: An annual survey conduced by the Financial Times has shown that economists are shying away from making forecasts regarding the outlook for the UK economy this year. Results highlighted that the majority of the economists that took part in the survey did not give a firm prediction for UK GDP for 2019, amid concerns over uncertainty around Brexit and global trade tensions. Looking ahead, we have a busy day ahead for data releases with PMI numbers due in the morning for the UK, Italy, France, Germany and Eurozone, the times of the releases can be seen below. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar Corporate News, Upgrades and Downgrades Deutsche Telekom has filed a lawsuit over a 5G auction against the German government, highlighting issues with a set of preconditions for participating in the auction. China National Tobacco Corp, the biggest cigarette maker in the world, has announced plans to IPO it's international business unit on the Hong Kong stock exchange. According to the Times, Iceland is facing a £21m bill for breaching minimum wage rules as staff voluntarily had sums taken from their wages which was then paid into a savings scheme, meaning pay had fallen below the national minimum wage. Playtech, a gambling software company, will pay £25.2m in a tax settlement with Israeli authorities following an audit of its financial accounts. 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. US equities rallied late on Thursday to close higher in a wild session which saw the Dow finishing 1.1% up, after initially falling over 500 points earlier in the day. The S&P and Nasdaq also fell 2.8% and 3.3% respectively, but both ended in positive territory after the late surge. Donald Trump is said to be considering an executive order which will ban US firms from using equipment built by Chinese companies ZTE and Huawei, according to a Reuters report. Overall, European markets fell in their first trading session post-Christmas. The Dax saw a slide of 2.8%, while the FTSE fell as the day continued ending down 1.5%. The Cac followed by falling 1.1%. Japanese 10-year government bond yields fell by three basis points taking it down to negative 0.004%. Gold rose 0.5% to $1,281.40 an ounce, which is its highest level in over six months. Crude oil also increased yesterday, the price increased to $45.75 a barrel - a 2.5% rise. UK, US and Europe: Thursday's roller coaster session comes after the historic rally on Wall Street on Wednesday, as the Dow surged over 1,000 points marking its biggest daily point gain. The early sell-off in yesterdays session was sparked by renewed trade tensions between US-China and weak US consumer confidence data for December. Dave Campbell, principal at BOS explained that "The uncertainty will continue to weigh on the market," and "I think that's going to help drive the volatility as we roll forward because I don't think it's going to be a clean path to an agreement or some kind of resolution." Large end of year FX swap rates: Please be aware that due to year end market factors we are seeing significant moves in the funding rates for most FX pairs. This has been observed across the market, although some pairs are looking to be worse affected than others (most notably if you are short US dollars). These factors include financial institutions balancing their books before the end of the year, putting a strain on certain currencies: Read more here Economic calendar - key events and forecast (times in GMT) [ Source: Daily FX Economic Calendar Corporate News, Upgrades and Downgrades The Defence Secretary has highlighted is "very deep concerns" regarding Huawei's involvement in the UK's mobile network upgrade. Cannabis retailer Green Growth Brands Ltd. plans to launch a hostile takeover bid for Aphria Inc. (APHA), which values the marijuana producer at nearly $2.1 billion. CentryLink, which provides telecommunication services to customers across 37 states, had significant internet and phone outages nationwide yesterday leaving its customers being unable to use their services. 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. Prime Minister Theresa May won a vote of no confidence in her leadership of the Conservative party last night. The results showed that Mrs May won the vote by 200 to 117, securing 63% of the total votes, she is now immune from any further vote's of no confidence for a year. GBP has fallen back from Wednesday's highs despite Theresa May successfully defending her leadership as investors believed she would win by a larger majority, the pound is currently trading at $1.2617 against the dollar. Several reports are suggesting that a second Canadian has been detained in China in what is believed to be a retaliation for the arrest of Huawei's CFO Meng Wanzhou, a spokesman said "we have been unable to make contact since he let us know he was being questioned by Chinese authorities". Asian equity markets ended positive on Thursday, the Hang Seng index was up slightly over 1%, Japan's Nikkei 225 rose 1.06% whist the Shanghai Composite increased by 1.3%. The US stock markets ended up following on from the positive performance in Asia. The Nasdaq rose 1% to 7,098.31, followed by a 0.64% increase in the Dow and the S&P 500 which climbed 0.54%. Gold remained steady, currently being priced at $1,244.46 per ounce. Asian overnight: Asian markets have enjoyed another positive session off the back of improving relations between the US and China. The pound enjoyed a bullish session after Theresa May managed to fend off the vote of no confidence with 200 votes. However, she still faces the same problem of passing a bill that has little support. UK, US and Europe: Whats next for Mrs May after her victory in the vote of no confidence in her leadership last night? Pressure continues to mount as the Prime Minister now heads off to Brussels for an EU summit to seek concessions on the Irish backstop. EU leaders have already indicated that there will be no renegotiation on Brexit, however founder of G+ Economics, Lena Komileva, believes the chance of meaningful concessions "is actually quite strong". Having said this, Brexiteer Jacob Rees-Mogg has said it was a "terrible result for the prime minister" and has called for her resignation, indicating a third of Tory MPs voted against her leadership. Looking ahead, the Swiss rate decision from the SNB is joined by the ECB monetary policy decision. The question is whether Mario Draghi will allow the asset purchase programme to end despite ongoing worries about eurozone fiscal and economic stability. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 12.45pm – ECB rate decision (1.30pm press conference): no change in policy expected, but with increased market volatility and a continuing stand-off with the Italian government dominating the news, the press conference may provide some insight about whether the bank is still confident about moving on rates later next year. Markets to watch: eurozone indices, EUR crosses 11.50pm – Japan Tankan large manufacturers index (Q4): index to rise to 22 from 19. Markets to watch: JPY crosses Corporate News, Upgrades and Downgrades Ocado said that revenue rose 12% to £390.7 million for the 13 weeks to 2 December, while average orders per week were up 13.1% to 320,000, but the average order size fell 1% to £104.91. Serco expects earnings per share to be ahead of forecasts by 5-10%, thanks to a lower effective tax rate. Trading profit for 2018 and 2019 is expected to be in line with forecasts. Bunzl said that it expects full-year revenue growth of between 8% and 9%, but a stronger pound was expected to hit performance. Johnson Matthey upgraded to buy at HSBC Pernod Ricard upgraded to hold at Liberum WPP upgraded to buy at Shore Capital Elementis downgraded to hold at HSBC Sabre Insurance cut to equal-weight at Barclays Ultra Electronics cut to underweight at Barclay 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. The US and China have agreed a temporary ceasefire on additional tariffs on each others goods at the G-20 summit in Argentina to allow for trade talks to continue in the new year. Dow futures soared more than 450 points as investors have reacted positively to the US-China news. Nasdaq futures also rose around 2.7%, followed by S&P 500 futures which jumped 1.7%. The dollar depreciated on Monday as investors looked to take up positions in riskier assets, such as the Australian dollar which rallied 0.75% and the New Zealand dollar which rose 0.5%. The dollar index, which measures the value of the dollar versus six major currencies, traded down 0.36%. European markets are expected to open higher this morning, again as a result of the announcement to postpone tariff escalation. The FTSE 100 is currently trading at 7,087, 107 points higher, the DAX 208 points above it's previous close, whilst the CAC is set to open up 83 points. Asian equity markets also traded higher, the Shenzen composite rose 3.5% followed by the Shanghai composite which increased by 2.9%. The increases came following a data release from the Caixin Manufacturing Purchasing Managers' Index which indicated factory activity increased in China compared to last month. Oil prices surged on Monday due to the US-China trade war truce, WTI crude futures were up to $53.63 a barrel, up 5.4%, whilst Brent crude futures were up 4.8%. Qatar's Energy Minister has announced that the country will leave OPEC on the 1st of January 2019, alluding to a "technical and strategic" change to develop and increase natural gas production. UK, US and Europe: The European markets are set to rally after a ceasefire in the trade war between the US and China, after Trump and Xi reached an agreement over dinner in Buenos Aires on Saturday. The deal should see both China and the US hold off on additional tariffs on each other's goods for the next 90 days, whilst negotiations continue in a bid to reach a long-term agreement. Helen Qiao, China and Asia economist with Bank of Amarica Merrill Lynch, explained that "In contrast to the fear — especially in Asia —that the hawks in US administration would make impossible demands, evidence of President Trump working towards a trade deal with China has emerged". With the announcement of a 90-day truce in the US-China trade war, how will this impact commodities? We have seen a surge in the price of oil ahead of the much anticipated OPEC meeting, but what impact will it have on base metals? Join our #IGCommodityChat on Thursday 6 December at 1pm (UK time) to discuss how trade wars are affecting base metals with Author and Economist Daniel Lacalle and John Meyer, partner and analyst at SP Angel. Get involved in the debate by tweeting your questions to @IGTV or by commenting in the section below. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar Corporate News, Upgrades and Downgrades Netflix is under scrutiny by HMRC as the British operation declared sales of £23.9m, way below what the Times estimates the business generates. Convenience store chain McColl's has issued a profit warning today, as the company highlights the collapse of supplier Palmer & Harvey as a "significant supply chain disruption". Stobart Group has announced that dividends will be cut for the fourth quarter to 1.5 pence. The firm said in a statement "The board believes it is prudent financial discipline to use proceeds from further disposals in the medium term primarily to invest in value-creating opportunities based on sustainable operating cash generation and to maintain a strong balance sheet". 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. May will start her two-week campaign to sell her historic Brexit deal to MPs as EU leaders have agreed on the UK's Brexit deal during the summit held in Brussels over the weekend, outlining it is "the best and only deal possible". European Commission President Jean-Claude Juncker explained that anyone who thinks that the EU will offer improved terms if MPs reject the deal will be left "disappointed" - MPs are expected to vote on the 12th of December. Asian equity markets had a mixed session on Monday afternoon as the energy sector declined due plunging oil prices. The Hang Seng index rose by 1.69%, followed by the Shanghai composite rising 0.29% and the ASX 200 which fell 0.86% - with the energy sub index down by 2.71%. Oil prices managed to reverse some losses after a near 8% drop in the previous "Black Friday" session, WTI crude futures were up 1% followed by Brent futures rising 1.6% to $59.71, although still below $60 per barrel and near Friday's low of $58.41. The deadly California wildfire, which started on the 8th of November, is now said to be 100% contained after destroying almost 14,000 homes and killing 85 people, with hundreds still missing. Tension between Russia and Ukraine escalates as Russia has opened fire and seized three Ukrainian naval vessels, injuring several crew members on-board. The countries are blaming each other for the incident, it's expected that Ukrainian MPs will vote on whether to declare martial law today. Bitcoin's sharp decline got worse over the weekend as the cryptocurrency entered into its largest sell-off since 2014 which is "really testing the faith of a few key players", the price dropped as low as $3,475 on Sunday. Asian overnight: A mixed Asian session saw a strong surge for Japanese and Hong Kong markets counteracted by weakness in China and Australia. That comes despite the careful optimism surrounding the upcoming trade talks between the US and China at the G20 summit. The weekend saw the EU27 ratify the Brexit proposal, in a move that should have pushed the pound higher. However, this barely happened, after the likeliness of parliamentary rejection was raised by Emmanuel Macron who stated that he would ensure the UK is forced into the backstop indefinitely unless his fishing related demands are met. Data-wise, we saw the New Zealand retail sales figures fall short of market expectations, with the core figure falling to the lowest level since 2016. We also saw Japanese manufacturing PMI fall to 51.8 from 52.9. Interesting to see the market reaction in the main session to the news of EU leaders approving the Brexit deal over the weekend UK, US and Europe: Theresa May will face immense pressure as she embarks on her Brexit battle to get her deal agreed in Westminster after the 27 leaders of the European Union approved the deal in just 38 minutes at the summit in Brussels. A recent report conducted by the National Institute o Economic and Social Research will not help her cause as it claimed that Mrs May's Brexit agreement will leave the UK £100 billion a year worse of by 2030. The potential Brexit deal has lead to many MPs venting their frustration publicly, including some of her fellow Tory "remainers". One of these is Sarah Wollaston, a conservative MP, as she explained that "I just don't think it's remotely possible that this deal would pass the commons", although she believes it's unlikely the UK will leave without a deal as MPs are "very opposed" to leaving without any deal at all. Having said this, EU leaders have warned British MPs about the risks of voting the Brexit deal down in a bid to aid the Prime Minister in getting the agreement through parliament. Jean-Claude Juncker reflected on an overall "sad day" but told reporters "I'm inviting those who have to ratify this deal in the House of Commons to take this into consideration: this is the best deal possible for Britain, this is the best deal possible for Europe, this is the only deal possible". Interesting to see the market reaction in the main session to the news of EU leaders approving the Brexit deal over the weekend. Looking ahead, much of the focus remains on Europe, with the German Ifo business climate survey providing the one major economic release of the day. Meanwhile, appearances from Draghi and Carney later in the day should ensure the EUR and GBP volatility is maintained in the wake of the weekend’s Brexit vote. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 9am – German IFO (November): business climate index to rise to 103.2 from 102.8. Markets to watch: EUR crosses 1.30pm – Chicago Fed nat’l activity index (October): expected to rise to 0.4 from 0.1. Markets to watch: US indices, USD crosses Corporate News, Upgrades and Downgrades Rio Tinto has sold its controlling stake in a Namibia uranium mine to a Chinese firm, fro up to $106.5 million. AstraZeneca said that the US FDA had granted an orphan drug designation for its autoimmune disease treatment. General Motors has announced plans to close it's Canadian plant which employs 2,200 workers. The board of Mitsubishi Motors are set to meet today to discuss the removal of Carlos Ghosn from his role as chairman due to his arrest for alleged financial misconduct. Vecture Group will incur a £40 million loss after it's astma drug trial failed, the chief medical officer said "Although we are disappointed that these results missed statistical significant, I remain confident in our proprietary technology and development capabilities". Allianz upgraded to overweight at Barclays Panalpina upgraded to buy at Jefferies Saipem upgraded to buy at HSBC Wood upgraded to buy at HSBC Altice Europe downgraded to outperform at RBC Pennon downgraded to sector perform at RBC Severn Trent downgraded to outperform at RBC 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.
  14. The Asia-Pacific Economic Cooperation (APEC) summit ended on Sunday with leaders failing to agree on a formal joint statement for the first time in its 25-year history, due to disagreements on trade. Chinese President Xi Jinping expected to gain influence in the Pacific as Trump and Putin decided not to attend the summit, however Xi left disappointed as the US and allies made it clear that they are prepared to use economic and military means to counter China's influence. Asian equities were mixed in afternoon as market volatility continues, the Nikkei rose by 0.5%, Hong Kong's Hang Seng was up 0.6% and the Shangahi Composite also climbed 0.2%. Australia's ASX 200 dipped by 0.6%. Southeast Asia's second biggest economy, Thailand, slowed in its third quarter as GDP showed no growth from the second due to tourism and exports weakening, a Reuters poll expected growth to be around 0.6%. Theresa May continues to defend her Brexit withdrawal agreement and indicates that she has "never thought about giving up" despite continued pressure from fellow Tories calling for her to resign. The next round of battling for Mrs May comes today at the CBI conference in London where Jeremy Corbyn is also expected to attend. Oil prices have increased by approximately 1% due to expectations that Saudi Arabia, the top exporter of oil, will push OPEC to reduce supply by around 1.4 million barrels per day by the end of the year. One of the leaders of the Houthi movement, Mohammed Ali al-Houthi, announced yesterday that he is ready to initiate a ceasefire in Yemen as long the opposing Saudi-led coalition is prepared to do the same. Asian overnight: Asian markets were largely higher overnight, with the Australian ASX 200 providing the one outlier to the wider bullish story. Chinese stocks led the way, with the Shenzhen composite rising almost 1% despite ongoing uncertainty in relation to US-China trade ties. No doubt investors will be monitoring Trump's upcoming meeting with Xi in Buenos Aires for the G-20 meeting, interesting to see how talks develop UK, US and Europe: Brexit issues remain key for the UK, with weekend suggestions of an extended transition period from Michel Barnier seeing the pound grind lower overnight. A somewhat quiet start to the week on the economic calendar means that traders will be heavily focused on any advancements in the plot to oust Theresa May amid a potential vote of no confidence. Boris Johnson has been extremely vocal in his dismay over the draft Brexit deal in his column on the Telegraph, calling it an "appalling sell-out" as he lays out his own plans for the UK's withdrawal from the EU - a "SuperCanada" style trade deal. The relationship between the US and China continues to be strained after the APEC conference over the weekend. Vice President Mike Pence piled pressure on China in his address as he explained that "China has taken advantage of the United State for many, many years and those days are over". No doubt investors will be monitoring Trump's upcoming meeting with Xi in Buenos Aires for the G-20 meeting, interesting to see how talks develop. The meeting is expected to take place between the 30th of November to the 1st of December. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar Corporate News, Upgrades and Downgrades BHP Billiton has settled a dispute with the Australian government relating to sales of raw materials. The firm will pay £386 million in additional taxes. McBride has sold its European personal care liquids business to Royal Sanders Group for £12.5 million. LondonMetric said it sold its retail park in Ipswich for £22 million. TSB appoints Debie Crosbie as new CEO, replacing Paul Pester whom resigned after the banks IT downfall which left nearly two million customers losing access to online banking services earlier this year. Fairfax, an Australian based media company, has got the approval of its shareholders to merge with Nine Entertainment which will cause a huge shake-up of the Australian media industry. Bakkafrost upgraded to neutral at SpareBank Novartis upgraded to buy at Goldman Oerlikon upgraded to buy at SocGen Arkema downgraded to sell at Goldman Swatch downgraded to neutral at MainFirs 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. Theresa May faces a crucial cabinet meeting today at 14:00 UK time as she seeks support from senior ministers for her draft Brexit deal between the EU and the UK. In light of the news of a potential Brexit deal being agreed, the pound rose 0.12% against the dollar on Wednesday morning and 0.16% against the Euro. The US equity markets generally ended down as Wall Street fails to claw-back earlier losses from the lackluster performance of the energy sector. The S&P slipped 0.2%, it's fourth straight decline, the Dow fell by around 100 points and the Nasdaq closed flat. US crude has dipped 7% settling at $55.69, a one year low, which has sent the energy market into a sell-off mode as OPEC and other oil producers have been increasing output as well as exemptions granted by the US on buying oil from Iran. However, we may see a correction soon as producers will meet next month to discuss the supply of oil. Overall a mixed session for Asian stocks on Wednesday after varied results on China's economy and the oil drop. Shanghai Composite Index fell 0.9%, the Hang Seng dropped 0.8% and Japan's Tropix Index saw an increase of 0.2%. Interesting news surrounding digital money, as the IMF indicates that central banks should consider issuing digital currencies. Head of the IMF Christine Lagarde said whilst speaking in Singapore "I believe we should consider the possibility to issue digital currency. There may be a role for the state to supply money to the digital economy". Asian overnight: A mixed session overnight saw gains in Japan counteracted by weakness across most of the other major markets. The Australian ASX 200 was the notable under-performer, falling over 1% thanks to substantial weakness across the energy sector in the wake of the crude decline. That decline was partly down to the OPEC monthly report which saw markets shift focus onto the oversupply that seems likely in 2019. Data-wise, we have seen a whole host of economic releases, with Japan falling into negative growth for Q3 (-0.3%), while Chinese releases fared somewhat better given the rise in fixed asset investment and industrial production. Interesting to see trader sentiment today in the UK and European markets as a volatile session is expected, will we see the markets go in the green or is it still to early too get behind this Brexit deal? UK, US and Europe: The main focus of today is likely to be on Brexit concerns, given yesterday’s breakthrough in talks. The final agreement is far from assured a safe passage, and thus the market reaction is likely to be heavily impacted by the ability to pass through Parliament. With that in mind, expect sterling volatility, with any signals of how the votes might go likely to play a major role. Also watch out for the latest inflation data, with UK CPI expected to rise to 2.5% today. In mainland Europe, markets will be keenly following the latest eurozone Q3 GDP number, alongside the industrial production figure. Finally, the US follows on from the UK with the inflation theme, where CPI is expected to rise to a nine-month high. The news of a potential Brexit agreement will have eased investors fears over a no-deal scenario, we've already seen an increase in the value of sterling due to the announcement. The deal addresses the Northern Ireland backstop, one of the most highly contentious issues which was creating a dead-lock in getting a deal over the line. It is believed that the draft deal aims to avoid a hard border with Northern Ireland by keeping the UK aligned with the EU customs union for some time. However, this has caused many Brexiteer's and the DUP, who have a confidence and supply agreement with the Tories, to question exactly how this proposal will work in practice. Interesting to see trader sentiment today in the UK and European markets as a volatile session is expected, will we see the markets go in the green or is it still too early to get behind this Brexit deal? Not everyone was pleased with the announcement of this potential Brexit deal. Jacob Rees-Mogg announced he could withdraw his backing for Theresa May as "She hasn't so much as stuck a deal as surrendered to Brussels and given in to them on everything that they want and tried to frustrate Brexit". Fellow Brexiteer Boris Johnson claimed that "this is just about as bad as it could possibly be", if the leaked reports about the deal are true. Lookout for breaking news after the crunch cabinet meeting today, which is scheduled to go ahead at 14:00 UK time. Economic calendar - key events and forecast (times in GMT) Source: Daily FX Economic Calendar 9.30am – UK CPI (October): prices to rise 0.2% MoM and 2.6% YoY from 0.1% and 2.4% respectively. Core CPI to be 2.2% from 1.9% YoY. Market to watch: GBP crosses 10am – eurozone GDP (Q3, 2nd estimate): QoQ growth to be 0.2% from 0.4%. Market to watch: EUR crosses 1.30pm – US CPI (October): prices to rise 0.3% MoM and 2.4% YoY, from 0.1% and 2.3% respectively. Core CPI to rise 0.2% MoM from 0.1%. Market to watch: USD crosses Corporate News, Upgrades and Downgrades Numerous reports suggesting that airline Flybe has been put up for sale after issuing a dramatic profit warning less than one month ago, the company's shares have fallen nearly 75% since September. SSE has announced losses of £246.4m for the six months to the 30th of September, the chairman of the British energy firm said "This is disappointing and regrettable, but important changes are now being made to the way SSE manages its exposure to energy commodities". WeWork has reported that Japanese technology group Softbank has invested a further $3bn into the office space provider. Smiths Group plans to separate out its underperforming medical division from the rest of the firm/ Q1 trading revenue fell 1%, thanks to good growth at the energy division that offset poorer performance at its medical unit. Underlying growth for the full-year is still expected to match last year’s. Workspace Group suffered an 18% fall in first-half profit, to £101.6 million, although net rental income rose 17% to £35.4 million. The dividend was raised by 20% to 10.61p. British Land said that first half underlying profit fell 14.6% to £198 million, and added that the retail market remained challenging. Auto Trader upgraded to buy at Peel Hunt Burberry upgraded to add at AlphaValue Tullow upgraded to hold at Panmure Gordon BB Biotech downgraded to hold at Baader Helvea ThyssenKrupp downgraded to hold at HSBC Rio Tinto downgraded to sell at Liberu 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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