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.
Stocks Bounce On Fed Rate Cut Optimism

Wall Street soared higher overnight. The Dow rallied 500 points in its second-best trading session of the year thanks to a more dovish Fed Charmin Jerome Powell. Asian markets followed suit and European bourses are pointing to a stronger start on the open in a clear case of central banks to the rescue, even if the effect is only short term.

At an event hosted by the Federal Reserve Bank of Chicago, Jerome Powell signalled that the Fed stood ready to ease monetary policy, to support the US economy, in the case of a downturn amid a drawn-out US – Sino trade dispute. The three main US indices each gained over 2% with the Nasdaq climbing 2.7% paring losses from the tech rout earlier in the week.

Powell gave the markets what they wanted to hear, and the result was a spectacular rally, as traders increased their bets of a rate cut happening before the year end. Jerome Powell’s speech followed similar comments from other Fed officials earlier in the week. This is usually a sign that the Fed wants to prepare investors for a shift in policy. Risk assets lifted as investors responded to the prospect of a lower interest rate environment. An environment which is more favourable to business owing to reduced borrowing costs.

No end in sight for trade war

Whilst the markets are giddy on central bank support, the effects could be short lived. Let’s not forget the other half of the equation is the escalating trade war on multiple fronts. Today the markets are happy to focus on Fed support, but with the US Commerce Department promising retaliation in the event of China’s rare earth’s threat, this trade war looks set to get worse before it gets better.

Gold shines on rate cut optimism

The changing tone of the Fed boosted stocks across the globe, however, the dollar trended lower. The weaker dollar and the prospect of a rate cut, even by September is keeping gold elevated at $1330. The opportunity cost of holding non yielding gold is declining, offering support to the precious metal.

Can euro hold its gains ahead to Thursday’s ECB rate announcement?

The euro is capitalising on the weaker dollar, pushing back up to $1.1278 even after data showed inflation to be lacklustre and slipping further away from the ECB’s target of 2%. Today euro traders will look towards retail sales data, which are expected to have declined in April. The weak inflation and worsening economic data for the bloc is likely to spook ECB policymakers as they meet to discuss monetary policy. A more dovish ECB could see the euro quickly give back some of its recent gains.

26-6-2019

WTI up 2%, gold falls and stocks ease
Asian equities edged lower, after Wall Street closed in negative territory for a second consecutive day regardless of the solid expectations of a Federal Reserve (Fed) rate cut next month. At his speech in New York on Tuesday, Fed Governor Jerome Powell reiter… Read more

25-6-2019

Iran tensions boost risk-off trades
Nothing much happened on Monday, except from the US imposing further sanctions on Iran, including the country’s supreme leader Ayatollah in what is seen as a ‘symbolic’ and even a ‘provocative’ action.So, in one hand, we have the developing Iran story that mov… Read more

24-6-2019

Oil gains, stocks mixed on Iran tensions
The week begins with a limited risk appetite, as tensions between the US and Iran escalate. The US prepares to impose more tensions on Iran today.Oil extended gains in Asia; Brent crude trades near $65 a barrel, as WTI is preparing to test the 100-day moving a… Read more

21-6-2019

GBP rebounds, S&P500 hits all-time high
The S&P500 advanced to a fresh all-time high on Thursday, as the dovish Federal Reserve expectations fueled the equity purchases around the globe this week. Slack made a solid debut in New York Stock Exchange. The price surged to $42 per share, well above … Read more

20-6-2019

BoJ, BoE to stay pat, Slack goes public
Equities extended rally as the Federal Reserve (Fed) delivered a sufficiently dovish accompanying statement not only to meet the market’s expectation, but also to surprise to some extent. The Fed maintained its benchmark rate unchanged at 2.25%-2.50%, kept its… Read more

19-6-2019

Stocks rally on dovish ECB, Fed in focus
The European Central Bank (ECB) President Mario Draghi’s speech was a godsend for the European bond and stock markets on Tuesday. The Eurostoxx 50 and the Dax closed the session 2% stronger, the CAC rose 2.20%, as the euro got shattered across the board.The EU… Read more

18-6-2019

Markets calm pre-Fed, EUR CPI in focus
Investors in equity and foreign exchange markets are reluctant to take a direction before this week’s much expected Federal Reserve (Fed) decision. The S&P500 (+0.09%) and the Dow (+0.09%) closed flat on Monday. NASDAQ gained 0.62%, as technology stocks ra… Read more

18-6-2019

Facebook cryptocurrency Libra validates bitcoin
Libra will expose 2 billion Facebook users to crypto Stablecoins like Libra don’t compete with Bitcoin Bitcoin back in a bull market Today Facebook is set to release a whitepaper about its new cryptocurrency dubbed Libra. Libra could mark the beginning … Read more