Japanese equity markets underwent a marginal recovery as the yen took a breather from its 7-session intensive rally. Fears that the ‘one-sided’ move in the FX market could lead to an intervention sooner or later have imposed some vigilance for now amongst the yen bulls. Chinese stocks underperformed even though Chinese Premier Li said that more supply side reforms could be on the horizon given that the economy remains under pressure. Yuan volatility fell to a five-month low, which could well act as a trigger for an increase in risk appetite in the near term.
The US dollar softened in Asia as Fed’s Kaplan said there was little need for an April hike in light of weak economic data. Reuters reported that recent FX fluctuations will likely have had a significantly negative impact on North American firms – more will be known as the earnings season kicks off in earnest now.
WTI futures are consolidating around $40/bbl. Some of this upside move can be attributed to the softer greenback – certainly the fundamentals do not seem to have changed. Goldman Sachs has kept its negative bias and reported that the Doha oil meeting due on April 17th, may not deliver a 'bullish surprise'.
Commodity markets were mixed. Steel hit a 10-month high in Shanghai, lifting the iron ore prices in Asia; copper fell toward the cheapest levels since February in London.
Buoyed yesterday on foot of a weaker dollar gold consolidates above the $1250 handle but has thus far failed to move past the $1260 level. The yen gained the most against the US dollar, followed by the Antipodeans. The Aussie dollar has garnered a positive spin today on the recovery in iron ore prices and solid business confidence data.
The euro and the pound remain flat. The UK inflation report has not gathered much momentum in London. With a rise of 0.3% year on year expected, the upside surprise for UK inflation this morning has kept sterling bid against the dollar, less so against the euro. Headline CPI was 0.5% while core came in at 1.5%.
Even though the number was higher than consensus, it will be unlikely to change the markets perception on when to expect monetary tightening. Nothing is expected form the Bank of England until next year particularly as the spectre of the EU referendum looms in June.
Alcoa, often described as the bellwether stock, was the first to report earnings last night. Setting the tone for the rest of the corporate earnings calendar perhaps, one could say that they were poorly received-the stock dropped 4.9% in after-hours trading. As was expected, commodities prices dragged on sales ahead of a planned company split.
An upside surprise for UK inflation this morning has kept sterling bid against the dollar, less so against the euro. Headline CPI was 0.5% while core came in at 1.5%.
Another day, another big move in mining stocks. Steel hit a 10-month high in Shanghai, lifting iron ore prices in Asia and helping to push the likes of Glencore (+2.76%) and Anglo American (6.6%) to the top of the index in the early part of the session. It’s still not been enough to push the FTSE100 clear of the 6200 level which has been a substantial barrier over the past number of sessions.
The upside moves in gold prices have also elevated the precious metals’ producers Fresnillo (+1.56%), Randgold (+1.04%) this morning.
Standard Chartered (+2.51%): seeking to sell $4.4bn of assets in Asia – amongst then $1.4bn of stressed loans made to Indian firms.
Ashtead Group (-3.5%) Cut to hold v buy at HSBC.
Intu Holdings (-2.62%) cut to hold at Peel Hunt
Whitbread (-1.91%) lower on news it has appointed Dominic Paul as MD of Costa – he is to replace Chris Roberts who decided to leave after 4 years in the role.
Housebuilders are under pressure too. The uncertainty regarding Brexit and the extreme valuations in the property market have ignited fears of an overheating market.
Barratt Developments (-1.22%)
Burberry (-1.7%) due to report earnings on 14th April. The luxury company is taking its cues from LVMH – it has fallen 3% in Paris. Terrorist attacks in Europe and weakening demand in Asia is weighing on sales.
We expect the Dow to open flat at 17556.
Finger Pointing At Russia and US inflation Lingering trade war concerns pulled the Dow Jones over 150 points lower overnight, as investors feared that a flawed trade policy could be as significant and damaging as a flawed monetary policy. Whilst key trading pa…Read more
US & European futures fall following another White House resignation Whilst US indices managed to book a positive finish overnight, the futures are tanking as the revolving door at the White House is once again in action. The resignation of Trump’s top eco…Read more
Risk-on trading returns as trade war fears ease Wall Street finally snapped a four-day losing streak on Monday, although the exact reason behind the return of risk appetite was difficult to pinpoint. The Dow closed over 330 points higher, whilst the S&P 50…Read more
US equity markets continued their Powell inspired sell off overnight, as risk aversion dominated and investor concerns over a faster pace of tightening at the Fed continued to weigh on Wall Street. The Dow ended the session 380 points lower, whilst the S&P…Read more
Wall Street showed no signs of giving up the recent rally, as it booked another positive close overnight; its third consecutive winning session. The continued stabilisation in interest rate expectations helped US equity indices hit a 4-week high, with the Dow…Read more
Italy will hold a general election on 4th March 2018. Last year this was being identified as one of the big risk events of 2018. Since then, the economic climate has changed dramatically in Italy, which is in turn reducing the risk attached to thi…Read more
Upbeat start to event packed week
European markets look set to start the new and event-packed week on a positive note. The move higher comes following a generally upbeat session in Asia overnight and a strong end to the previous week on Wall Street, which saw…Read more
FOMC minutes confuse the market
The eagerly awaited minutes from the FOMC January meeting were released on Wednesday evening. The release was more closely watched than usual given recent market conditions, which have seen rising inflation and interest rate co…Read more
Despite positive trading in Asia overnight, Europe is seen taking its lead from the US, which closed lower under the weight of a late sell off in Tech stocks and a large scale move out of Walmart.
Wall Street closed lower for the first time in 7 sessions, …Read more
US equity indices closed the overnight higher after reversing opening losses. Wall Street added a fourth day to the winning streak, even as bond yields rose following stronger than forecast inflation data, but weaker retail sales. The Dow closed 250 points hi…Read more
Figures showing hotter than anticipated US inflation in January produced, upon first glance, a surprising reaction in global markets. Higher US inflation, which by its nature should mean higher US interest rates led to a sell-off in the US dollar and a rally i…Read more
A fresh bout of selling hit Wall Street overnight sending US equity indices plummeting once again. For the second time in less than a week, the Dow plunged by over 1000 points, closing 4.2% lower, in its second worst point drop in history (the biggest being on…Read more
After record losses were posted on Wall Street on Monday, US equity indices manged to finish the session higher overnight. The Dow Jones turned an initial 500 plus point loss into a 567-point gain, clawing back around half of the 1,100 points wiped out in Mond…Read more
European stocks are headed sharply lower start thanks to the weak lead given to them by Wall Street. The FTSE 100 is set to open just above its December lows. The next day after an unusually big sell-off is always a big test of a market’s strength. A repeat of…Read more
arkets participants found themselves in the rare position of witnessing falling prices this week. It has naturally sparked questions of whether a larger correction is in store. The Dow Jones has pulled back 3% while the FTSE 100 has dropped nearly 4.5%. These …Read more
US markets rebounded on Wednesday boosted by better than expected earnings, recovering from a heavy two day sell off at the beginning of the week. The Dow closed 72 points higher, whilst the S&P and Nasdaq both increased 0.1%. A fitting way to end the mont…Read more
Eurozone Growth on solid footing
Eurozone growth remained solid in the fourth quarter. EZ Q4 GDP hit 0.6% q/q and accelerated to 2.7% y/y, up from 2.6% in Q3. The Eurozone economy grew by 2.5% in 2017, up from 1.8% in 2016. Eurozone growth was faster than …Read more
Wall Street opens 2018 with fresh records
Wall Street opened up 2018 with record highs, boosted by energy, tech and consumer discretionary sectors. S&P 500 and Nasdaq indices hit record intraday and closing highs. The rise in tech stocks helped the Nasdaq…Read more
US markets paused for breath on Wednesday, after the Senate approved the long-awaited US tax reform bill, and the House of Representatives passed the bill again, owing to a procedural snag. The Dow finished down 0.1%, the S&P declined 0.08% and the Nasda…Read more
A quick summary of key global dynamics that could change in 2018. We discuss politics, economics, central banks, markets and the potential impact on market pricing. Topics include Bitcoin, FAANG stocks, inflation and gold.
A Tory Party lea…Read more
Stocks drift lower while awaiting US tax bill
Markets started out on the back foot and drifted for most of the afternoon. The dip-buyers that have stepped in throughout the year failed to materialise, fearing the ticking clock on US tax reform. Until tax re…Read more
US Markets Finished Steady As Investors Await Details on the Tax Reform
Wednesday’s US session had a definite wait and see feel about it. The Dow closed marginally lower and the S&P 500 flat, as investors paused, waiting for more details on what the rec…Read more
Stocks in Europe have had a generally positive open on Monday. While geopolitical risk looks to be on the rise, hopes of deregulation led by the US is helping a risk-on mood. Spanish equities are bucking the trend on Monday, with the IBEX index opening lower a…Read more
The unusually smooth bailout of a big Spanish bank and upwardly-revised OECD global growth forecasts helped create an aura of stability in markets. The stability was perhaps inevitable on the eve of what stands to be a very eventful day on Thursday.
Banco …Read more
The FTSE 100 first dived to 7489p then rebounded past 7525p at the London open. Fresnillo rallied past 2% as gold extended gains.
Lloyds (+0.97%) shares were well bid, as Britain sold its remaining stake in the bank, emotionally marking the end of a painfu…Read more
Hopes of owning a part of the next internet giant propelled Snap shares over 40% higher on its first day of trading - but investor confidence has cratered since. Snap’s maiden earnings will set the tone for investor expectations moving forward.
Hello, welcome to LCG’s look ahead to the key events in markets for the week starting April 3rd, 2017. The video edition will return next week, and in a new location!
Stock markets are consolidating near recent peaks and the big question is whether th…Read more
Stocks were under pressure on Monday following the collapse of Donald Trump’s first attempt to overturn Obamacare. For many, the healthcare bill has been the moment that crystallised the risk of economic failure under The Donald. Ironically, the reacti…Read more
Slow burn in markets
The anticipation of a busy week ahead including the possible triggering of Article 50, a potential populist revolt in the Dutch national election and a likely US interest rate hike meant there was a slow burn in markets on Monday.
… Read more