Financial market research and analysis

Our analysts have their fingers on the pulse of the world's financial market news.

CFD trading is high risk and may not be suitable for everyone.
BoE, ECB & US CPI under the spotlight

Today will be a busy day for traders with 2 central bank rate decisions and US inflation data all due for release within a few hours of each other. The BoE monetary policy announcement will kick things off, followed shortly after by the ECB rate announcement and then, US CPI data. The central bank deluge in Europe will provide an indication of how keen the central banks are this side of the Atlantic to raise interest rates going forwards, whilst the US data will give an indication of how much pressure is on the Fed to continue hiking rates.

BoE

The BoE is not expected to change monetary policy given that it raised rates just 6 weeks ago in the August meeting. Therefore, the tone of the minutes and the statement will be of particular interest to traders. The central bank is expected to stick to its mantra of limited and gradual rate rises. However, with recent economic data printing as good as, if not better than expected, Brexit optimism on the up following signs and comments from the EU that a deal could happen in November, and market expectation particularly dovish with no hike fully priced in until the end of 2019, there could be room for a slightly more hawkish tone from the BoE.

A slightly more positive BoE could see the pound target August’s high of $1.3145.

ECB

Similarly, the ECB is not expected to alter monetary policy. However, there is a strong possibility that the ECB will look to lower growth forecasts after data from the region has generally surprised to the downside. The latest example of this being industrial production numbers in the previous session which showed a contraction of -0.8%, worse that than the -0.5% forecast. ECB Governor Draghi highlighted a concern over low inflation in the previous meeting and inflationary pressures have not picked up since then. Therefore, investors will be interested to see whether the low inflation concern has increased at the central bank. The Q&A session could produce some strong movements in the euro as Draghi is likely to be questioned on topics such as Italy and trade tension. Should growth forecasts be lowered we could expect the euro to take a hit.

CPI

Whilst US wages data finally showed a decent pick up in August, pointing to an increase in inflationary pressure, the most recent US PPI, measuring inflation at wholesale level, disappointed. PPI in August registered the first decline in a year and a half on the back of stabilising oil prices over the past month and a stronger dollar. Prices at the petrol pumps and the stronger dollar could also weigh on inflation at a consumer level. CPI is expected to dip to 2.8% in August, down from 2.9% the previous month. Weakness in the CPI reading could see the dollar come under pressure.

A word on oil

Oil has eased back early this morning after moving towards a 4 year high in the previous session. With Hurricane Florence heading towards the east coast, US oil production could be disturbed whilst fuel needs for a huge evacuation boosted demand. The start of the US hurricane season, in addition to the hit on Iran’s production which is due to start in November, could see oil well supported across the coming weeks.

The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please note that 79 % of our retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing money.

The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please note that 79 % of our retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing money.

21-5-2019

Nasdaq with US tech sector plummet on Huawei decision
Wall Street closed lower as the fallout from Huawei dragged down tech stocks. The Nasdaq plummeted 1.7% on Monday as the crackdown on China’s largest telecommunications and electronic equipment maker pressured the US technology sector. US chip makers tumbled a… Read more

20-5-2019

Oil jumps as OPEC signals intention to maintain cuts
Markets Mixed As Google Suspends Business with Huawei Asian markets put in a mixed performance overnight as investors paused, waiting for new developments in the US – China trade dispute. This comes after a week of escalating tensions between the two powers. … Read more

17-5-2019

Pound below $1.28 as Theresa May prepares to leave
Wall Street closed higher for a third straight session overnight as solid economic data and robust earnings from the likes of Cisco and Walmart boosted sentiment. Investors put US China trade dispute anxieties behind them and continued to jump back into equiti… Read more

16-5-2019

Trump's Visible Hand Drives Markets
The Dow and the broader US market extended the relief rally on Wednesday amid easing trade tensions. News that Trump would restart trade talks with China boosted optimism that the two powers could avoid a prolonged, economically damaging trade war. But it woul… Read more

15-5-2019

Stocks Rebound with Chinese Stimulus Hopes
Asian markets followed Wall Street higher overnight as trade war fears eased. Markets across Asia rebounded from 3 ½ month lows on a softening of stance from Trump and amid growing expectations of further stimulus from the Chinese government. Despite the advan… Read more

14-5-2019

Worst Day on Wall Street Since Jan 3
Wall Street closed deeply in the red on Monday. The Dow shed over 600 points and the S&P dumped 2.5% in the worst trading day since 3rd January. Investors rushed to take risk off the table as China raised tariffs on US imports, a retaliatory measure to the… Read more

13-5-2019

Futures Plummet As Investors Eye Trade Dispute Impasse
As we head into the new week, trade tensions will remain a key focal point for the markets and risk sentiment. In the UK specifically, Brexit and Theresa May’s ability to cling to power ahead of next week’s European elections will be an important driver of dom… Read more

10-5-2019

Yield Curve Inverts But "Beautiful Letter" Keeps Deal Hope Alive Despite Tariff Increase
Global equity markets were mixed as investors digested the latest headlines from the US – China trade talks. Asian markets pared earlier gains, European bourses are pointing to a stronger open, whilst US futures head south. The mixed response from the market r… Read more
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.