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GeorgeIG

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  1. GeorgeIG
    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. 
  2. GeorgeIG
    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. 
  3. GeorgeIG
    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.
    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. 

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