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.
A holding pattern before big week

MARKET WRAP: A holding pattern before big week


Friday’s blowout US jobs report kept Asian stock market sentiment upbeat at the start of the new week.  In Europe, indices are down as investors strap in for what promises to be a busy week. There are two big central bank meetings, the US-China tariff deadline and the UK election. Our feeling is that these will all pass with favourable, or at least manageable results for markets. However, with major averages at 52-week highs after a strong year and with 4 big events that could unexpectedly turn sour, the risk : reward for traders favours the downside.

The FTSE 100 is being restrained by losses in oil and mining sectors after a fourth monthly decline in Chinese exports highlighted the fallout from the trade war.

The DAX is nursing small loses but is outperforming other indices in the region thanks in part to data showing an unexpected rise in German exports for October.

The S&P 500 looks set to open slightly lower but within 1% of all-time highs after the strong NFP-led gains on Friday. There’s little in the way of US data until the Fed makes its interest rate decision and sets out its economic projections on Wednesday. That probably means – you guessed it – comments on the trade war as the major catalysts. The clock is ticking in the last week before new US tariffs begin on December 15.


EURUSD The euro is off the 4-day low seen after the surprisingly strong US jobs report. Still, as strong as the November jobs report was, our feeling is it doesn’t move the dial for the Fed this week. It is the first press conference for new ECB president Christine Lagarde on Thursday. A market-moving slipup seems unlikely since she is well experienced from similar events at the IMF.

GBPUSD The pound is at its highs of the day (HOD) after weekend polls mostly showed a widening lead for the Conservatives with three days to go until the UK election. EURGBP is making fresh two-year lows. A poll from BMG has the Conservative Party with 9 point lead over Labour, up from 6 a week ago. Survation showed the lead widening to 14 points from 9 a week ago, while polling from Savanta ComRes saw the lead narrow to 8 points from 10 a week ago. There are some discrepancies about the size of the lead but the latest polls all point to a Sterling-friendly Conservative majority.


Crude oil is a little softer at the start of the week, trading in line with general market sentiment. For WTI to be above $60 at the end of the week, we’ll need at the very least, an extension to the US tariffs deadline. In the context of typical oil market volatility, we thought the post-OPEC gains were rather constrained. That would suggest if we can get through December 15 without more US tariffs on China, there is still some pent up speculative demand for oil.

Gold fell back from $1480 per oz and its 50-day moving average after US jobs report sent the dollar flying on Friday. The best result for gold this week would be a dovish Fed hinting at rate cuts after its pause and Trump throwing a 2019 phase one trade deal out the window with more tariffs. However, consensus is that the opposite happens- and that threaten a break below $1450 support.


Trump approves TikTok deal, Powell & Superdry earnings
MARKETS The Dow Jones fell on Friday as investors had to contend with another selloff in big tech, led by Google. Friday moves came as four major types of options contracts were set to expire in a quadruple witching, triggering a rise in volatility. European e… Read more


USD/JPY sub-105 and UK retail sales
MARKETS US stocks fell in volatile trading on Thursday amid renewed pressure in shares of major tech companies. Conflicting messaging on the coronavirus vaccine front and uncertainty around further stimulus also weighed on sentiment. European equities fell aro… Read more


Buffett-backed Snowflake IPO & Fed Preview
MARKETS The Dow Jones ended roughly flat on Tuesday, pressured by a fall in financials and a u-turn in Apple after the tech giant launched a new services bundle and hardware. The S&P 500 was up 0.52% while the Nasdaq added 1.21%. Apple rose 0.2% but had be… Read more


Brexit bill first debate & tech stock sell-off
Markets The major U.S stock indexes fell for the second week in a row, as technology stocks experienced their worst pullback since March. The market was volatile in a holiday-shortened week, with the Nasdaq posting a 4% decline on Tuesday followed by a nearly… Read more


Gold hits 7-year high after Powell Warning
Fed Chair Jay Powell has warned the US economic recovery might last through the end of 2021. The Fed is normally too optimistic in its forecasts so the outlook feels bleak. Still, warm weather is encouraging countries to continue exiting lockdown. If the flu s… Read more


Powell predicts more pain to come but no NIRP
A warning from the top of the US central bank that there’s more pain to come isn’t going down well across markets. Fed Chair Jerome Powell warned yesterday that more stimulus will likely be needed in the US to fend off the economic damage done by virus and pol… Read more


“Suffering and death” warning hurts markets
A sense of caution has taken hold across markets. Shares, riskier currencies and oil are pointed lower. There’s a reassessment of the likely timeline for economic reopening. Our sense is markets juiced up by higher liquidity may have gotten ahead of themselves… Read more


Bitcoin halving, dollar breakout on second wave fears
Market sentiment remains fragile. There’s a lot of emphasis being placed on the virus numbers in economies that have been gradually reopening.  Wuhan, the City in China where it all began reported its first ‘cluster’ of new cases yesterday after lifting restri… Read more