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Tech Rally, US–Sino Trade Talks & Weaker Dollar Boost Sentiment

European bourses are set to take the lead from a positive session on Wall Street and Asia overnight. A drive higher from tech stocks on Wall Street helped lift Asian equities after their recent battering, pulling them off 2-year lows.

Asian markets were ending the week on a positive note after sinking for 10 straight sessions, ending Wednesday, on rumours of trade talks between the US and China. The chances of these trade talks making any real progress look doubtful, especially given that they have failed so many times before; it is difficult to see why they might find more common ground on this attempt. However, in a display of optimism, the markets were willing to look beyond these concerns and realities.

The dollar held onto weakness from the previous session, pulled lower by disappointing consumer inflation data, which came hot on the heels of weaker than forecast producer prices, putting the greenback on course for its largest weekly declines since February. The weak dollar, combined with improving optimism over US-China trade talks, plus action by Turkey’s central bank to support the free-falling lira, means Friday is shaping up to have a more positive feel than we’ve seen for a while.

Breathing Space for Lira After Rate Hike

The Turkish Lira has regained at least some credibility after a sharp rate hike from its central bank to shore up the currency. A rate hike to 24% has shown investors that the central bank is prepared to act and act big if necessary to support the lira. This has provided some relief to the markets. Whilst this eye-watering level of rates will not reset attitudes and erase fears towards emerging markets, it is providing a strong buffer and allowing markets to breathe a sigh of relief.

Will Sterling Hold onto Gains Amid A Deluge of US data?

The pound has managed to maintain gains from the previous session following the rate announcement from the BoE. Traders are focusing more on the central bank lifting growth forecasts than the stark warnings that BoE Governor Mark Carney gave on the potential impact of a no deal Brexit on the UK economy.

On a quiet day for the UK economic calendar, whether the pound manages to hold onto its BoE inspired gains depends largely on the slew of US data due for release this afternoon. After the recent weaker than expected inflation data, investors will be watching US retail sales data closely for clues over building inflationary pressures. US manufacturing and industrial production are expected to tick higher, as is the University of Michigan confidence data, potentially showing that the US economy is doing a good job of shrugging off escalating trade tensions.

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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.