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PM Bulletin: Gold
29 Jan 2016
AM Bulletin: BOJ takes rate negative
29 Jan 2016
PM Bulletin: BOJ in focus
28 Jan 2016
AM Bulletin: FOMC disappoints, but earnings offer support
28 Jan 2016
PM Bulletin: Facebook reports after the close
27 Jan 2016
AM Bulletin: Crude still driving equities
27 Jan 2016
PM Bulletin: Tomorrow’s FOMC meeting
26 Jan 2016
AM Bulletin: Equities slide on crude sell-off
26 Jan 2016
PM Bulletin: Silver chart
25 Jan 2016
Weekly Bulletin: Promise of further stimulus halts equity slide
25 Jan 2016
PM Bulletin: EURUSD chart
22 Jan 2016
AM Bulletin: Equities rally on ECB and oil
22 Jan 2016
PM Bulletin: Dovish Draghi triggers euro sell-off
21 Jan 2016
AM Bulletin: ECB meeting in focus
21 Jan 2016
PM Bulletin: Crude makes fresh multi-year lows
20 Jan 2016
AM Bulletin: Stocks slide as oil slumps
20 Jan 2016
PM Bulletin: Bank of Canada rate decision
19 Jan 2016
AM Bulletin: Equities surge on relief rally
19 Jan 2016
PM Bulletin: Crude oil - long-term charts
18 Jan 2016
Weekly Bulletin: China and oil weigh on equities
18 Jan 2016
PM Bulletin: Long-term gold bullion chart
15 Jan 2016
AM Bulletin: More woe from China
15 Jan 2016
Holiday Schedule: Martin Luther King Day Monday 18th January 2016
14 Jan 2016
PM Bulletin: Equities: bull or bear?
14 Jan 2016
AM Bulletin: Investors remain jittery
14 Jan 2016
PM Bulletin: The Bank’s rate decision
13 Jan 2016
AM Bulletin: Oil rebound lifts stocks
13 Jan 2016
PM Bulletin: Saudi Aramco’s IPO
12 Jan 2016
AM Bulletin: Crude closes in on $30
12 Jan 2016
PM Bulletin: US Fourth Quarter Earnings Season
11 Jan 2016
Weekly Bulletin: 2016: Trouble ahead?
11 Jan 2016
January: Non Farm Payrolls Out Today
08 Jan 2016
PM Bulletin: Another blow-out payroll number
08 Jan 2016
AM Bulletin: China effect calms markets
08 Jan 2016
PM Bulletin: Non-Farm Payroll look-ahead
07 Jan 2016
AM Bulletin: Equities slump after 2nd China trading halt
07 Jan 2016
AM Bulletin: Investors remain jittery
06 Jan 2016
AM Bulletin: China steadies and Europe rallies
05 Jan 2016
AM Bulletin: Chinese equities plunge
04 Jan 2016


Indices Update

US equities fell sharply last night as crude oil slumped back below $30 per barrel. Asian Pacific equities also struggled with the Shanghai Composite closing 6.4% lower.

Last week Mario Draghi gave equities a lift by delivering a dovish ECB statement and press conference. He highlighted the increased market and geopolitical risks since the beginning of the year and said that the outlook for inflation was considerably lower than it was at the ECB’s last meeting in early December. Most importantly he said the ECB must review and perhaps reconsider its stance on monetary policy when in next meets in March. Now investors are looking ahead to tomorrow’s US Federal Reserve meeting and the Bank of Japan (BOJ) rate decision on Friday. The Fed isn’t expected to make any changes to interest rates as it hiked last month. But analysts will be listening out for any dovish cooing in the light of the equity market sell-off since the New Year. As far as the BOJ is concerned, there was speculation last week that it may be ready to announce further stimulus. On Saturday at the World Economic Forum in Davos BOJ Governor Haruhiko Kuroda said the bank wouldn’t hesitate to adjust policy, “including easing policy,” to achieve the 2% price target.

The FTSE 100 index closed at 5,877 down 23 points (or 0.4%) on the day

The German DAX fell 28.7 points or 0.3% to finish at 9,736.2

The US30 closed down 208.3 points to finish at 15,885.2 The S&P 500 ended at 1,877.1 down 29.8 points while the Nasdaq 100 fell 1.5% to close at 4,196.5

Equities Update

Kingfisher (KGF), owner of B&Q and Screwfix, announced a five-year transformation plan aimed at increasing annual pre-tax profits by £500 million. The company plans to become a "single, unified company" by investing heavily in its digital offering - as well as making considerable cost savings. But investors were unimpressed as the changes are expected to put a dent in profits for the next two years. Shares fell 5% on the announcement, despite the news that the company would return £600 million to shareholders over the next three years on top of ordinary annual dividends. The transformation plan is expected to cost £800 million. The stock ended 6.6% lower at 324.2 pence

Commodities Update

Oil fell sharply yesterday. Both WTI and Brent closed back below $30 per barrel and on the day’s lows. Investors are once again focusing on oversupply as it was reported yesterday that Iraqi production hit a record last month. Yesterday Reuters reported that Iraq's oil ministry said the country had record output in December. Separately, a senior Iraqi oil official said that output could be increased even more this year. The sell-off in crude has continued this morning.

At the end of last week oil experienced its biggest two-day rally since 2008. The rally came as traders considered the approaching blizzard which eventually hit the US East Coast over the weekend and persuaded a rush to cover short positions. But as severe as the blizzard was, it proved to be short-lived, as did the short covering in crude.

There is renewed chatter going round that OPEC is considering calling an extraordinary meeting. It generally holds a meeting every six months and the next one is scheduled for June. However, Qatar's energy minister said a request for such a gathering was being discussed.

Gold and silver rose in early trade yesterday, helped by a weaker dollar. Gold spent most of the morning session above $1,100. But it is still struggling to make much headway above here as it has been hemmed in by the 100-day moving average which currently comes in around the $1,103/5 area. Nevertheless, there has been renewed interest in gold since the New Year thanks to the ructions in the equity and bond markets. Gold managed to break and hold above $1,103/5 last night and has made further gains this morning. Its next upside target is the 200-day moving average which currently comes in around $1,120. However, it is too early to say that the precious metal has finally broken out to the upside. If the US dollar begins to rally again then gold could easily break back below $1,100.

Forex Update

The US dollar was generally weaker yesterday against the majors, although currencies linked to oil such as the Canadian dollar, came under pressure as crude gave back some of last week’s gains. The EURUSD dipped briefly following the release of Germany’s Ifo Business Climate survey. This came in at 107.3 for December undershooting the consensus expectation by more than a full point and also the lowest reading since this time last year. The survey is a key piece of economic data for the Euro zone. Not only does it assess the state of the currency area’s most economically significant country, but it is a comprehensive survey covering key sectors and covers a large sample size. Coming hard on the heels of last week’s dovish ECB statement, the weaker number supported the view that the central bank will announce further stimulus at its next meeting in March.

However, the euro was soon rallying again while the dollar was on the back foot. This was despite Mario Draghi’s dovishness last Thursday. Perhaps investors are remembering how the ECB under-delivered back in December so aren’t taking hints about additional stimulus at its March meeting too seriously. Now it’s all about the two central bank meetings this week – the US Federal Reserve tomorrow and the Bank of Japan early on Friday. We’ll soon see if the Fed’s FOMC decides to draw back from its 100 basis point rate hike projections for 2016.

Upcoming events

Today’s significant economic data releases all come from the US. They include the S&P/Case Shiller Composite-20 House Price Index, Flash Services PMI, Consumer Confidence and the Richmond Manufacturing Index. Bank of England governor Mark Carney will testify on the Financial Stability Report before the Treasury Select Committee. Overnight sees the release of Australian CPI.


Spread Co is an execution only service provider. The material on this page is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by Spread Co Ltd or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


Posted by David Morrison

Tagged: AM Bulletin

Category: AM Bulletin

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