Financial market research and analysis

US markets were closed overnight for Thanksgiving. This meant thin trading volumes across the globe but no pause in the wild swings that have been characteristic of recent sessions. Europe experienced falls in the region of 1% in the previous session, as has China overnight. The typical subdued trading of Thanksgiving was certainly not evident yesterday, perhaps it will be today? Whilst today isn’t a public holiday in the US, many take it off extending the Thanksgiving break into the weekend.

Asian markets were once again slipping lower with China leading the charge. Investors are struggling to shake off or even look beyond concerns of slowing global growth and trade tensions. China is in a period of slowing economic growth which has been exasperated by growing trade tensions with the US. The big issue here is that there is little if any reason to think that China’s situation will improve next year.

Hopes were being pinned on President Trump and China’s President Xi making progress at the G20 meeting at the end of November. Developments ahead of this meeting haven’t been promising. Realistically the best that we are going to see from the G20 is an agreement by the US and China to keep talking. The trade tension story has moved past the point of a quick resolution. We expect this risk to continue to be a theme in 2019 which will continue to weigh on appetite for riskier assets.

Despite the slump across the Asian market, Europe is pointing to a slightly higher start, although the FTSE is seen lagging behind its counterparts. Global growth and trade tension concerns hitting China has dragged metal prices lower overnight. Given the heavy weighting of the miners on the FTSE, the UK index will be at a disadvantage. Oil majors are expected to weigh on the FTSE as oil prices fall again.

Oil falls (again)

Oil experienced another volatile session overnight. Swings of over 1% have been the norm in the latter part of this week and volatility has been high since the beginning of November. This highlights just how jittery the oil market is right now. US inventories hitting their highest level in 11 months fuelled concerns over a global crude glut amid a worsening economic outlook. The fact that oil traders shrugged off expectations that OPEC will start withholding supply in 2019 to rein in a glut reflects just how concerned oil traders are over the future outlook.

German GDP & Eurozone PMI’s

Eurozone data releases will dominate the economic calendar today. German GDP is expected to remain constant at 1.1%. Given concerns over slowing growth momentum investors will be watching carefully for any signs of weakness. Eurozone service PMI is also expected to dip marginally. The euro is trading 0.1% higher versus the dollar in early trade. Weaker than forecast readings could see the euro take out support at €1.14 and head towards €1.135.