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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

Overnight brought the latest update for Chinese GDP. This came in at 6.8% fourth quarter year-on-year. GDP for 2015 came in at 6.9% as expected, which was unchanged from the third quarter, but China’s lowest GDP reading for twenty five years. European equities and US stock index futures were sharply higher in early trade. Traders were encouraged by gains of over 3% on China’s Shanghai Composite. Also, crude oil has steadied. This looks like a short-covering relief rally for stocks and how this now plays out could be very instructive. If equities can hold on to early gains then we could be set to reverse last year’s losses. But if this rally fades as did all the attempts last week, then that could signal that we’re entering a fully blown bear market.

As for yesterday’s trade, US markets were mostly closed for Martin Luther King Day. Nevertheless, we still got an idea of US stock market sentiment from index futures. After a sharp sell-off in Monday’s Asian Pacific session these rallied ahead of the European open. However, they struggled to hold on to their gains. As noted in our latest “Weekly Report” the first levels of significant support come in around 16,000 for the Dow and 1,870 for the S&P500. If we break and close below here for a couple of sessions, then from a technical perspective, further losses look likely. It’s worth noting that a number of high yield bond ETFs gapped lower at the end of last week and are trading at levels last seen in 2009.

The FTSE 100 index closed at 5,779.9 down 24.2 points on the day or 0.4% lower.

The German DAX fell 23.4 points or 0.3% to finish at 9,521.9

The US30 closed down 391 points to finish at 15,988.1 The S&P 500 ended at 1,880.3 down 41.5 points or 2.2% while the Nasdaq 100 fell 3.1% to close at 4,141

Equities Update

The Italian MIB got slammed yesterday and ended 2.5% lower. The sell-off was driven by the Italian banking sector. This fell sharply on concerns of growing bank debt. Over the weekend it was reported that the European Central Bank (ECB) was looking at non-performing loans in the Euro zone banking sector. Banca Monte dei Paschi di Siena (BMPS) was one of the worst performers as it fell 14.8% to close just shy of 77 cents per share.

Commodities Update

The oil market was another one which went quiet for Martin Luther King Day. Like the major global stock indices, Brent and WTI ended last Friday down sharply and near the worst levels for the day. In early trade yesterday oil fell back towards levels last seen in 2003. However, it recovered as the day proceeded despite the stronger dollar. But it struggled to stay in positive territory and remains close to multi-year lows.

Back on Friday the WTI and Brent oil contracts crashed through the $30 barrier within minutes of each other. The break triggered a flood of stop-loss selling which sent oil even lower. The prospect of Iranian output hitting the already over-supplied markets was blamed for the move.

In early trade yesterday precious metals built on their gains from the end of last week. Gold and silver drifted down from their best levels but nevertheless managed to spend most of the trading session in positive territory. This was quite an achievement given the stronger dollar. However, with the main US futures exchanges closed for Martin Luther King Day, trading volumes were lighter than usual. Yet gold and silver are still trading dangerously close to multi-year lows. Buyers of the two metals will feel better if they manage to rally further from current levels and build bases above $1,100 and $14 per ounce respectively.

Forex Update

The US dollar crept higher yesterday on very light volumes thanks to Martin Luther King Day in the US. Traders held back from taking on much in the way of exposure following last week’s equity market sell-off. No doubt they’re waiting for leadership and an uptick in trading volumes once the US markets reopen this afternoon.

Last Friday saw the release of a stack of weak US data including Retail Sales, Industrial Production and the Empire State Manufacturing Index. The disappointing numbers led to a sharp sell-off in the US dollar. Investors spent the last fortnight of 2015 factoring in the prospect of four 25-basis point rate hikes from the Fed this year. But the New Year carnage in China’s stock market together with a falling yuan has tempered expectations to some extent. The strong US Non-Farm Payroll reading ten days ago certainly seemed to vindicate the Fed’s decision to raise rates a month ago. But everything else seems to suggest that the US central bank has tightened at the wrong time. If so, then we could see the dollar give back much of last year’s gains. But first the EURUSD will need to break above resistance around 1.1000.

Upcoming events

Today’s significant economic events include UK CPI and RPI. We also have ZEW Economic Sentiment surveys from Germany and the Euro zone. US companies reporting earnings include Bank of America (BAC), eBay (EBAY), Morgan Stanley (MS) and Netflix (NFLX).

Disclaimer:

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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