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Asia quiet with Chinese New Year. Dollar Rebounds post NFP

Trading in Asia was quiet overnight as celebrations for Chinese New Year kicked off and Chinese markets remain closed.  We expect muted trading in Asia across the week, a sharp contrast to recent weeks which have seen US – Sino trade headlines and China growth concerns drive movement.

European and US futures are pointing to a quiet start with markets struggling for direction. This comes after US markets closed mostly higher after an impressive US jobs report. US stocks and the dollar charged northwards on Friday after the non farm payroll showed 304,000 jobs were created in January. This smashed expectations of just 166,000 showing that the US government shutdown had little effect on the labour market. Wage growth was a little more disappointing at just 0.1% month on month.

Dollar Higher After Strong Jobs Report, But How Long For?

Whilst the dollar surged on the strong headline figure it is doubtful whether the greenback will be able to maintain its strength given the Fed’s new patient approach to hiking rates across 2019. After the Fed’s U -turn towards monetary policy last week, traders will be particularly keen to hear what Fed policy makers have to say as they hit the airwaves this week. Investors will be tuned in to remarks from Cleveland Fed President Loretta Mester on Monday and St Louis Fed President on Friday. Fed chair Powell is due to speak on Wednesday; however, it is unknown whether he will address monetary policy.

Gold Lower On Dollar Strength

Gold is moving lower after a 1.3% rally across the previous week. Whilst the dollar strengthens following the strong US jobs report the precious metal will remain under pressure. However, with no plans from the Fed to hike anytime soon, we expect the move higher in the dollar to be short lived and gold to quickly resume its rally back towards $1325.

Pound Lower As Nissan Ditches UK

The pound started the week on the back foot as Nissan fired a warning shot on a no deal Brexit. The car maker reversing a decision to manufacture a new model in Sunderland is just a taste of things to come under a no deal Brexit. The Nissan headlines come as Theresa May heads back to Brussels in an attempt to re-negotiate the Irish back stop arrangement, the most contentious part of her Brexit deal. Brussels are still standing firm; they are not prepared to re-open discussions on the Brexit deal, which will make Theresa May’s job challenging if not impossible. With the clock ticking, downward pressure is likely to remain on the pound as no deal Brexit fears reignite.

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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