Insight from our top analysts on the news that matters
Today’s ECB meeting is likely to show a downward revision in headline HICP inflation this year and in 2016. It’s unlikely Draghi will commit fully to any ramping up of the current programme of bond buying (€60b per month) or indeed guarantee any extension post September 2016. Given that the stimulus measures were intended to push up the inflation rate to its goal of around 2%, we remain very far away from this metric. Five year, five year forward swap rate is little changed around 1.7% and German bond prices have ...Read article
It makes a pleasant change to look at a stock screener and see mostly green today. With China’s stock market closed for the week long military parade, investors in Europe have used the opportunity to look for bargains in the aftermath of the recent rout. Thus, the ‘’out of sight, out of mind’’ mentality is certainly boosting risk appetite today.
Following the wild sell-off in the equity complex, the central banks are naturally expected to remain fully supportive of the financial markets. The European Central Bank ...Read article
Consolidation is the name of the game this morning as European equity traders lick their wounds following yesterday’s sell-off. The FTSE remains above the 6000 level but is down 0.22% in early trade. The technical picture would suggest that this psychological level is breakable.
The energy sector is in the red this morning, as oil prices spurn the recent rally and consolidate. Every other sector is finding a little relief rally after yesterday’s sell-off aided by some broker upgrades and bargain hunting within the defensive stocks.<... Read article
Combination of positive US data and expectation of further stimulus from the BoJ pushed USDJPY above its Ichimoku conversion line 120.35. Surpassing the conversion line paves the way to a further correction to the daily cloud cover (122.38/123.07). While the PM Abe recognized it will be hard for to reach the BoJ’s 2% inflation target, BoJ’s Kuroda said the JPY appreciation is only temporary and the BoJ remains ready to adjust policy. The verbal intervention has successfully curbed the appetite in yen longs. Higher US yields continue being supportive.Read article
The Asian stocks recorded a second day of gains as the recovery in oil and commodity prices continued. Nikkei stocks closed the week up by 3%, while Shanghai’s Composite surged another 4.80% before the weekend.
Japan’s ex-fresh food prices remained flat in July versus expectations of deflation, jobless rate improved from 3.4% to 3.3% over the same month and the retail sales expanded 1.2% on year. Besides encouraging economic data, knowing that the BoJ stands ready to act kept the sentiment upbeat in Japan before the weekend.
In ...Read article
After a hectic roller-coaster of a week across financial markets many will be glad to see the back of it. Having shed some £72bn last Monday the FTSE has rallied hard to recoup some of its losses helped by China’s decision to finally pull the finger out and intervene. The moves by the PBOC and the better than expected US GDP has revived risk taking to a degree. This is most notable from the moves in bond and precious metals prices. China selling USTs is likely a major ...Read article
The high-beta, high yield currencies are popular among traders, especially among those who have suffered heavy losses and hence are brave enough to take risk in an effort to recover damages.
Among the G10, the Antipodean could be good carry opportunities, funded by yen and euro. The oversold conditions in AUDJPY hints at a possibility for correction to 87.40, equivalent of 50% retracement on August unwind. AUDEUR is expected to refresh attempt to 0.6520 (former year low).
In the emerging complex, Turkish lira is a front-runner. EURTRY hit 200...Read article
The US durable goods rose 2% on month to July, hence positively surprised the market expecting a 0.4% drop in July. On yearly basis however, the contraction in US durable goods orders contracted by a hefty 20%, a quite large scale that we have not seen since 2009.
In the aftermath of yesterday’s US data, the expectation that the Fed will certainly refrain from hiking the federal fund) keeps the USD appetite limited. There is less than 30% chance of a September increase.
Due today, the US 2Q (second ...Read article
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