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.
US futures edge lower as China constricts range of topics in trade negotiations
US equity futures kicked off the week on a negative note on fears that this week’s high-level trade talks between the US and China wouldn’t lead to a satisfactory outcome, after Chinese officials announced having narrowed the range of topics that they are willing to discuss on.

Discussions, which will begin on Thursday, will likely keep investors on their nerves and limit the risk appetite.

Mixed US jobs data, on the other hand, spurred the expectations that the Federal Reserve (Fed) could lower its rates by another 25 basis points by the end of this month.

The US economy added 136’000 new nonfarm jobs in September, versus 145’000 penciled in by analysts. The average earnings stalled. Although last month’s figure was revised up to 168’000 from 130’000 and the unemployment rate fell to 3.5%, a fresh fifty-year low, investors remain skeptical about the health of the US jobs market, with thousands of job cuts expected in the coming months from big names such as HP.

But Kansas City Fed President Esther George, who is among the most hawkish Fed members, said there is no need to cut the rates further, as the US economy is doing well and missing the 2% inflation target over the past decade hasn’t been a concern.

Still, treasury yields tanked, and the yield curved steepened, as the probability of a 25-basis-point cut jumped past 80%. The US 10-year yield fell to 1.50% for the first time in a month.

WTI crude opened the week quietly around the $52 a barrel. With the supply-side shock being fully digested following the Aramco drone attacks, trading on oil markets will likely be demand-oriented. Hence, a further slide toward the $50 level is just a matter of time provided the fading optimism regarding the US-China trade negotiations, low PMI numbers across the globe and the slowing economic activity.

Japanese equities fell on Monday, as the USDJPY slipped to 106.57 on safe-haven demand.

Swiss franc gained and gold opened a touch above the $1510 an ounce. The risk-off environment and low sovereign yields could encourage further capital flows into the precious metal and push the price of an ounce toward the $1520-resistance for the second straight week.

Elsewhere, Hong Kong suffered the most violent anti-China protests during this weekend. Shops closed, trains stopped operating. HK government banned face masks in an attempt to cool down the tensions. Businesses in Hong Kong have perhaps endured the biggest opportunity cost since the beginning of the protests, as tourist arrivals from mainland China dived 86% during the most prosperous Golden Week holidays.

Chinese and Hong Kong markets will resume their activity tomorrow. Hong Kong protests and waning hope regarding a US-China trade deal could weigh on stock prices and further dampen the global market mood.

FTSE futures (-0.14%) hint at a soft start in London, though the relatively cheap British pound should ease the selling pressure as the index approaches the 7000p mark.

The pound can only remain under the pressure of Brexit uncertainties, as PM Boris Johnson jibs at demanding a delay to European leaders beyond the October 31st deadline. Johnson insists that the UK should leave the European Union by October 31st, even if it means a no-deal Brexit, but he has no mandate to do so. According to the latest news, he will be seeking legal action at the Supreme Court to avoid sending a letter to his EU counterparts asking for a delay. Although a delay is what appears to be the most plausible scenario for the moment, there is a rising anxiety that Johnson could find a way to avoid extending the Brexit deadline and crash the country of the European Union too early, and unprepared.

Cable dived below the 1.23 mark in the early trading. The pair will remain in the bearish consolidation zone below the 1.2350, major 38.2% Fibonacci retracement.

22-10-2019

Is Brexit happening? The ball is in Parliament’s court. P&G to top estimates.
Stock markets trade on a positive note on growing expectations that the US and China may finally clinch a partial deal at next month’s APEC meeting in Chile. US President Donald Trump said that China is already buying US farm products, and he wants them to buy… Read more

21-10-2019

Pound slips as UK leaves BoJo’s deal aside and votes to delay Brexit
The pound fell to 1.2875 against the US dollar, as British lawmakers voted to ask for a delay on the Brexit deadline on Saturday rather than voting on the Brexit deal that Boris Johnson put on the table.As a result, a letter was sent to EU’s Donald Tusk asking… Read more

18-10-2019

China slows. Pound gains as Parliament prepares to vote on Johnson’s deal
The Chinese GDP growth fell to 6% in the third quarter of 2019, although the industrial production jumped to 5.8% y-o-y in September and the retail sales advanced 7.8% as expected, versus 7.5% printed a month earlier. Fixed assets excluding the rural area expa… Read more

17-10-2019

Pound traders hedging downside risks, again. PM’s alternative businesses at jeopardy.
If the week started on some optimism regarding the US-China trade deal and the Brexit, it will probably end on battered hopes of seeing any progress on both ends.The S&P500 (-0.20%), the Dow Jones (-0.08%) and Nasdaq (-0.30%) closed Thursday’s session in t… Read more

16-10-2019

US-China deal hopes are being dashed, again. Netflix in focus.
US stock markets closed in the green on better-than-expected bank earnings on Tuesday.But the US stock futures headed south in the overnight trading session, as tensions with China started rising again amid the US House passed a bill on Hong Kong, which requir… Read more

16-10-2019

US bill risks China retaliation
Shares in Europe slipped, and US futures are pointing lower on Wednesday. There’s some fear out there that China will retaliate to a US bill defending the rights of Hong Kong protestors. The timing is certainly awkward, just as the US and China struck a “phase… Read more

15-10-2019

China wants more talks. Euro gains ahead of a potentially ugly ZEW survey.
Chinese officials threw cold water on the optimism about Donald Trump’s first phase trade agreement, as they said to be willing to discuss more before signing a deal. We could already feel that the Chinese were not fully satisfied with their Washington visit, … Read more

14-10-2019

Equities edge moderately higher, no feeling of euphoria after US-China partial agreement
Equities began the week on a positive note amid the US and Chinese officials reached a partial trade agreement at last week’s negotiations.The S&P500 (+1.09%), the Dow Jones (+1.21%) and Nasdaq (+1.34%) gained on Friday, although Donald Trump’s announcemen… Read more