Our analysts have their fingers on the pulse of the world's financial market news.
Stocks waver with St Petersburg bombing
Markets were steady on Monday with no sign yet of a resumption of last week’s dip-buying in stocks. Anecdotally, traders appear to be waiting for FOMC minutes and the US unemployment report to test the conviction of Fed members signalling 3-4 hikes this year.
Apart a spurious social media-based poll reported in Russian media over the weekend putting Francois Fillon ahead, French election polling has been devoid of upset and isn’t causing much concern for markets. Still we know from the Brexit and Trump pattern, markets only really start paying attention to important elections the week before.
The pound and UK stocks fell in unison on Monday after the EU figuratively scrunched up Theresa May’s Article 50 letter and lobbed it into the bin over her demand for tandem trade and exit talks.
Early gains slipped away by the afternoon following some disappointing manufacturing data and reports of deadly explosions on the St Petersburg subway.
Germany’s DAX was the exception to the rule of lacklustre trading in Europe, coming within a whisker of its all-time high. The German index seems to have gained a new lease of life since Angela Merkel’s party had its run-way election victory in the state of Saarland. Political stability in Europe passed its first test after the Dutch election, making European shares look relatively more attractive than US peers.
Shares of Burberry led the FTSE 100 higher on news it would license its cosmetics business to Coty. It’s not exactly a flagship deal for Burberry in itself but could be a gateway to a new revenue model.
Licensing cosmetics out to Coty allows Burberry to monetise the cachet of its brand without the overheads.
Imagination Tech comfortably took the bottom spot in the FTSE 250. Investors gutted Imagination shares when Apple failed to renew its partnership.
Threat of a diplomatic spat between UK and Spain over the post-Brexit future of Gibraltar damaged sentiment towards the pound. Disappointing UK manufacturing data for March added to Sterling’s woes.
Gibraltar is the perfect example of the deep ties between the UK and the EU. Presumably a diplomatic solution can reached without war between the UK and Spain but demonstrates the kind of curve balls the negotiations will throw up. The pound fell against the euro and the dollar on Monday with GBPUSD dropping back below 1.25.
European economic data was a mixed bag leaving the euro down against the buck but up against the pound. Italian unemployment unexpectedly fell to 11.5% with youth unemployment falling to the lowest since August 2012.
Oil broke out of its short term double bottom pattern after supportive comments from OPEC Secretary-General Barkindo. Barkindo seeing oil stockpiles coming down reaffirms the belief behind the big pickup in oil prices last week. High compliance with existing output cuts and some members of OPEC calling for an extension contributed to the biggest weekly gain for Brent crude this year last week.
Gold was caught in the crossfires of some demand for a haven after the Russian subway explosions and strength in the dollar after strong manufacturing data. Precious metals have eased back from a strong rebound off the lows on Friday.
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. Losses can exceed deposits
Political turmoil in Washington combined with growing trade tensions sent Wall Street sharply lower overnight. A rumoured resignation from Attorney General Rod Rosenstein, plus US and Chinese trade tariffs kicking in and dampening hope of further trade negotia…Read more
European markets look set to turn lower at the start of trading on Monday. The new US and Chinese tariffs take effect today so traders in Asia and Europe look cautious. Both continents are more exposed to global trade than the US. For markets, the new tariffs …Read more
Whilst risk sentiment has been healthy across the week, this swelling optimism boosted US stock markets to an all-time high overnight. A rally in tech stocks, which have done a lot of lifting for the indices over the year, in addition to fading concerns over U…Read more
Despite a shaky end to trading on Wall Street overnight, which saw the Dow gain 0.6%, the S&P just 0.1% and the Nasdaq slip by the same, Asian markets moved broadly higher on improved sentiment. European bourses are taking the lead from the US over Asia, w…Read more
Asian markets took the lead from Wall Street overnight, rallying as the latest tit for tat measures in the escalating trade spat have not been quite as severe as the markets had been expecting. Tech stocks were also heavily in demand, bouncing back after steep…Read more
Traders are faced with a sea of red in risk-off trading as markets are set to open on Tuesday. Despite the fact the market has been expecting an escalation in trade tensions between the world’s two largest economies with further tariffs from Trump; the reality…Read more
Escalating trade tensions will once again be a central theme to driving sentiment and trading this week, with President Trump widely expected to levy tariffs on a further $200 billion worth of Chinese imports, potentially as soon as today. The elevated trade c…Read more