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Markets Rebound As US Treasury Yields Recover

Asian markets moved northwards, following a mixed close on Wall Street and a recovery in US treasury yields. 10-year yields edged higher after a 2-day selloff, which sent the yields to their lowest level since 2017 and below the 3 month yield. The so-called warning shot for a recession has been fired. However, the 10 year yield, which was being closely watched amid a lack of US data has since edged higher providing a level of calm to investors.

Given the potential for positive conclusions to near term risk events, such as Brexit and the US – Sino trade dispute, the recent selloff and recession fears appear a little over done. A successful negotiation of both Brexit and the US – Sino trade agreement could mean there is still more upside for riskier assets, throwing recession calls into doubt.

On Wall Street, home builders pushed higher on the prospect of cheap borrowing for longer. Tech shares moved lower after investors were left deflated by Apple’s new offering. Apple’s focus was on subscription services as a way of bringing in recurring revenue. However, a lack of detail has meant that investors are still looking for answers before they can buy into the newest vision. Apple stock closed 1.2% lower; a reflection of the disappointment.

US Consumer confidence and housing data

Investors will look towards a slew of US data due for release today. The most closely watched will be consumer confidence figures. The expectations is that consumer confidence ticked higher in March, this could support sentiment, as investors will be looking closely for any clues as to the health of the US economy. Housing data will also be under the spot light. New starts and building permits are both forecast to have fallen.

Oil gains amid increased Venezuelan tensions

Oil moved higher overnight clawing back losses from the end of last week. Recession fears pulled oil lower hitting the demand side of the equation. However, supply is still tight, amid continued OPEC cuts and sanctions on Iran and Venezuela. Increased tensions in Venezuela are offering further support to oil on Tuesday. Traders will now turn their attention to API inventory data for further insight into crude stock pile levels. Particularly after data last week showed that stock piles fell for a second consecutive week. Another fall in stock piles could see crude push above $60.00

Brexit update

The pound held steady overnight after Theresa May lost control of Brexit. Parliament voted 329 to 302 in favouring selecting their preferred Brexit option through a series of indicative votes. Ministers will now vote on a series of Brexit options for Brexit on Wednesday. Whilst the assumption is that this will lead to a softer Brexit or Brexit just being cancelled, the pound certainly hasn’t moved higher reflecting this. Ministers have resigned and threats of another general election are surfacing. The political instability is keeping a firm lid on any potential rally.

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23-8-2019

Stocks Advance Ahead Of Powell’s Speech At Jackson Hole
Asian markets took a leaf out of the Dow’s book and were on the rise ahead of a key speech by Federal Reserve Chair Jerome Powell. The Dow closed 0.2% higher overnight in a volatile session, whilst the S&P finished on the flat-line and the Nasdaq dipped lo… Read more

22-8-2019

Stocks Mixed As Traders Digest FOMC Minutes
The Dow staged an impressive comeback in the previous session, boosted by retailers and tech stocks even as the bond markets were once again flashing recession warning signals. The Dow rallied 240 points despite the 2 year bond yield inverting with the 10 year… Read more

21-8-2019

Italian politics & FOMC minutes to boost dollar?
Asian markets trade mixed overnight after Wall Street ended lower. European and US futures are pointing to a cautiously higher start on the open. After a wild ride over the past 10-day investors are sitting tight. A lull in news about the ongoing trade dispute… Read more

20-8-2019

Flows out of havens as recession fears let up
Asian markets followed Wall Street higher overnight and European futures are also pointing to a broadly firmer start on the open, amid growing optimism of stimulus in major economies which are showing signs of being negatively impacted by the ongoing US - Sino… Read more

19-8-2019

Stimulus Hopes Lift Sentiment & Stocks
Quickly recapping, equities experienced their worst week so far this year, and bonds soared as investors sought safety amid an escalation of the US – Sino trade war. The US and UK yield curves inverted flashing recession alarm warning bells. As the Dow dumped … Read more

16-8-2019

Tensions ease as central bank stimulus expectations grow
Wall Street finished a volatile session broadly on positive ground overnight, with the S&P and the Dow advancing whilst the Nasdaq nudged lower. Stronger than forecast US retail sales and better than expected earnings from the likes of Walmart helped calm … Read more

15-8-2019

Carnage on Wall Street as yield curves invert
As recession warnings flashed from the bond market, Wall Street plummeted lower overnight. The Dow closed down 800 points whilst the Nasdaq and the S&P tumbled 3% and 2.9% respectively. Asian markets followed US equity indices lower. An inversion of the 2… Read more

14-8-2019

Stocks Bounce On Trump’s Tariff Delay
Asian markets joined the relief rally overnight, which saw stocks on Wall Street surge, after the Trump administration delayed tariffs on some Chinese imports until December. Good news in the markets has been a rarity over recent weeks, so reports of the delay… Read more