Spreadex Market Update
Broad Market Rally on Monday Gives Way to Softer Start on Tuesday
Markets were broadly higher yesterday, capitalising on the continued weakness in USD. European assets traded higher despite further hawkish ECB commentary. Following on from the comments we heard from ECB’s Knot over the weekend, ECB chief Lagarde yesterday reiterated that the ECB would stay the course with rate hikes, signalling further aggressive action to come, in a bid to bring inflation back down to target. On the geo-political front, tensions between the US and China ratcheted higher again as the US challenged China with evidence of some Chinese companies’ involvement in the US war effort. Iran was also seen issuing fresh threats to the West, marking an escalation of tensions. The move is in response to the recommendation from the European Parliament that the IRGC be classed as a terrorist organisation.
Key Factors for Today
- USD remains muted – PMI data sets in focus today
- Equities higher on USD soft-patch – European assets shrug off hawkish ECB comments
- JPY sees return to demand amidst increased geopolitical tensions
- Metals turn higher – gold breaks out
- Crude muted by demand concerns – global PMIs in focus today
Coming Up
- EUR – Flash manufacturing & services PMI
- UK – Flash manufacturing & services PMI
- US – Flash manufacturing & services PMI
Equities Higher on Monday – Softer Start Today
Equities markets saw solid gains yesterday with indices rallying across the board in response to a muted US Dollar. Today, attention will turn to a raft of PMI data sets which will give the latest glimpse into global economic performance. Any signs of a pickup in activity recently will no doubt be welcomed by investors leading to further equities gains. However, any surprise weakness in these readings from the US, UK and Eurozone will no doubt put the focus back on recessionary risks, leading risk markets lower near-term.
Microsoft Earnings in Focus
US earnings season heats up again today with several big names reporting. Microsoft, Verizon, Johnson & Johnson and visa are among the heavy hitters posting results today. Microsoft in particular will be closely watched as a barometer for the big tech names to come later in the season with the Nasdaq likely to be highly led by the group’s results today.
JPY Sees Fresh Demand
Following recent weakness on the back of last week’s BOJ meeting, JPY has swung back into favour across the European open on Tuesday. JPY is benefiting from a softer start for risk assets today it seems, leading across the G10 FX space. For now, not seeing any news-flow attached to this move though the reversal lower in the Nikkei and the accompanying spike in JPY suggests a specific driver so will be worth monitoring incoming news today for colour on this.
Gold Breaks Out – Oil Muted on Demand Concerns
In the metals and commodities space, gold and silver are both seeing better demand today. Gold in particular is breaking out to fresh highs again, benefiting from the weakness in USD, while silver is remains rangebound for now. Crude is still seeing fairly muted action for now, though today’s PMI releases have the potential to drive some volatility. Concerns over the global demand outlook are keeping oil prices anchored lower for now so any weakness in today’s PMI readings will no doubt exacerbate this.
It's easy to open an account
- Fill in our simple online application form
- Fund your account
- Start trading the global markets instantly!
SEARCH FOR AN ARTICLE:
Enter a keyword and search for all relevant articlesMARKET ANALYSIS
RECENT POSTS
DISCLAIMER
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can also result in losses larger than your initial stake or deposit.
Spreadex Ltd is authorised and regulated by the Financial Conduct Authority, provides an execution only service and does not provide advice in any way. Nothing within this update should be deemed to constitute the provision of investment advice, recommendations, any other professional advice in any way, or a record of our trading prices. This update does not constitute or form part of an offer of, or solicitation for a transaction in any financial instrument, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore. Any persons placing trades based on their interpretation of the comments or information within this update does so entirely at their own risk.
No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained within this update by Spreadex Ltd or any of its employees and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained within this update.
The information contained within this update is the intellectual property of Spreadex Ltd and is protected by UK and International copyright laws. All rights reserved. Users may however freely download, distribute and reproduce extracts of the contents, subject always to accrediting Spreadex Ltd as the source and providing a hyperlink to www.spreadex.com.
